I think what makes me a good therapist is that I have a strong honesty policy in my own personal code of ethics. I have, though, gotten in trouble by being too honest or just being honest at the wrong time.
Sometimes patients come in for treatment yearning for an honest objective opinion, but once the truth comes out, it may be too much to handle. Perhaps someone wants to stay in an "ignorance is bliss" mentality. Or the truth bomb is so disruptive that it shakes the person's belief system to the core. It could be many things. Bottom line is that the truth can hurt.
So, can telling the truth all the time be problematic? Absolutely. If we were honest all the time and said whatever we were thinking, no one would have any friends. But generally, people do want to be told the truth. And they want to be told by their most inner circle of friends or family.
I read this linked article a week ago, and concepts within this article seem to keep coming up in my everyday conversations and in practice. While I have a strong honesty policy in my professional and personal life, I learned that perhaps I do need to "sugar coat" some things and play along with "social niceties" and "small talk" sometimes (Remember, I worked in prison for five years, so my approach was a bit more "rough" in the past).
I am a deep thinker and empathetic to a fault. I naturally want to share raw, personal experiences as it evokes emotions and provokes thought. But as I've read from this article, "Truthful Steven" doesn't need to be "on" all the time. I guess balance is the key take away here.