This happened to my 6.5 LC orange pad after 2 uses. I take good care of my pads. The others are fine. This one is worn and concave now. I could see it happening if I kept putting the polish in the center. But I usually put 3-4 dots on the edges, then spread it on the car.
i know this thread is a few weeks old but i wanted to add...
a while back i had some low pro 4" pads that i procured from AG. the velcro on the back was smaller than the backing plate they recommended with the pads, and the plate would instantly eat into the pad and destroy it. nothing like what the OP is suggesting, but just hold on!
so, i modified the backing plate by trimming the edges, so it would fit over the velcro that was available on these pads w/o hurting them. i was pissed because i had to hack up a new plate and lost a few pads within minutes of first use before i figured it out, so i called AG and Meghan send me some tall profile pads, but ones that have the velcro all the way to the edge...and they sent me a new backing plate to boot.
this was months ago. i was using the modded backing plate and the last of the low profile pads up until today. today i decided to use what they sent me as a fix to my situation. well, the tall profile pads did exactly what the OP is describing. they were caving in. well, after a few more passes, the thing EXPLODED and a billion little fine pieces of foam went all ove the place and the pad was spinning on the DA like a wet sock. I understand the physics with a little pad on the DA in terms of heat buildup, speed, etc, but dude- these things lasted probably 2 minutes each. My trusty old low profile pad finished the job that these couldn't, and with no issue whatsoever.
so, 1. don't get high profile small pads and 2. when you get low profile, make sure the velcro comes to the edge of the pad. with these guidlines you should be able to have success using the small pads.