The hotter the rad the greater the heat transfer. Letting the coolant get to 120C before turning the fan on saves fuel and allows greater heat transfer from the engine to the air. No risk to engine.
If the cooling air is already fairly warm (say, in the Sahara at 2 pm on a sunny day), if the rad isn't significantly hotter, you won't transfer any heat to the air, and the engine will instead get hotter. Make sense? I'm talking about the rate at which calories of heat are removed from the coolant by the air, not about the actual temperature.
This is the other reason not to screw around with the thermostat and bypass -- if you speed up the water flow too much, it won't stay in the rad long enough to loose any significant heat, and won't stay in the engine long enough to pick any up, either. The result is overheating! Coolant can't dump heat, and the metal gets much hotter than it should as the water races past.
Remember that MB uses fairly accurate gauges, not the funky non-linear ones you see in American cars. On those, by the time the needle gets close to the red, you've probably blown all the coolant out.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!