Here's a quote from Mike P on it.
"The benefit this approach offers is,
IF there are any iron particles in your car's paint you will dissolve and remove them chemically with the Iron-X instead of abrading and pulling them out with clay and then potentially instilling swirls and scratches into the paint because now you have iron particles embedded into the clay that you're rubbing all over the paint.
Iron X = Insurance Policy
In my opinion, doing an Iron-X treatment to paint that you've never worked on before is a good idea, it's like an insurance policy. You buy insurance to protect ourself but you hope you never need it.
You use Iron-X JUST IN CASE there's any iron particles in the paint but you actually hope that there's not.
It's better to use Iron-X and NOT see the spray turn red than it is to see the spray turn read. Think about it, if it turns red that means there was iron particles in the paint, that's a bad thing. If it doesn't, it's whew... I got lucky."