Watches from before 1940: still wearable on a daily basis?

There is nothing wrong with wearing a pre-war watch provided the item has been serviced well. However, a lot of those older watches did not employ a shock proof device so they are more suspectible to damage if knocked or dropped. Also, the cases tended to be a bit lighter than later cases, unless it's a pocket watch.

Tough one... depending on the movement, it may be too delicate (especially if it has no shock protection). OTOH, it is meant to worn...

I've used a Gruen Quadron from the late 20's for years. It has served me well given regular cleanings and an occasional repair. It uses a 15 jewel movement that I believe was sourced from Aegler and was probably one of the more reliable at the time. Even so, it is notably more delicate than my later watches.

I have a penchant for vintage watches. Most of my collection predates 1940.
A good manufacturer's movement can last several lifetimes with good care.
Today I am wearing a vintage Wittnauer from 1940 with the diamond dial and sub second at six. Like mentioned above, these vintage timepieces did not have shock jewels. Put them on over your dresser and not over the bathroom sink!
Assuming your employment doesn't require great physical stress for the timepiece, you should be fine.
Vintage watches are not water resistant so take care not to splash them even while washing your hands. My 1940 and 1949 Hamiltons both continue to serve me well as well as a 1939 Elgin and 1934 Bulova. The key is a good horologist (watchmaker if you don't also have vinatge and antique clocks) All watchmakers are not created equal! All of my vinatge timepieces have been serviced in the last year.
If the watch is running and keeping good time, that means it probably won't need parts. Have it cleaned, oiled and adjusted before you put it in to regular service.
If you use your vintage timepiece occasionally or switch between several, let them wind down between wearings. Do wind and set it once a month just to keep the oil circulated, like one would do for a vintage auto. With light use, have the clean, oil and adjustments done every five years os so, with daily use, service it every two years at least.

It really depends on what these routine activities are and how hard one is on their watches. They fare much better on the wrist of a senior than a teenager.

A few factors to consider:

1) Do you have a skilled, experienced and trusted watchmaker to regularly service the movement?
2) Is the movement common enough to scavenge parts when needed or are you willing to pay the expense for custom manufacturing of replacement parts should it be required?
3) Are you OK with the aging process and the visible manifestation on the dial - the potential for chipping you mentioned - or willing to pay for redialing? As you probably know, watch savants prefer the original dial regardless of the condition over a redial.
4) Is the watch about the emotion....... then above 3 factors get worked out as they occur?

Personally, I collect on emotion above all else but consider all 4 factors. I have two vintage Hamilton Piping Rocks, 1929 white gold and a 1943 yellow gold that are in my rotation. I wear them with no speacial thought to their age and they behave as expected for watches of that era........5 or so seconds loss a day. I also know that I can send then to Rene Rondeau, who specializes in Hamiltons and located in the Bay Area and have the watches serviced to spec.

I've also been disappointed by Omega who simply did not have any more replacemnt parts for one of their smaller movments dating to the 1950's; and similarly by Eterna and Longines who also ran out of parts for pre-1950's vintage movements. So I stopped collecting certain brands.

You should consider having your watchmaker take a look at the movement and learning his/her advice if you're sinking some money into this. Otherwise, follow your heart.

That yellow gold Hamilton is beautiful. I especially enjoy the ostrich band.

So Doc, tell us more about the watch!. What manufacturer, metal, dial...?