I used to have an 81 Interstate that the speedo got pegged often. I never had any problem with either the cable or the speedo head. It apparently doesn't hurt them... at least that was my experience with them.
Ahh, one of those Joan Claybrook model speedometers. No, it won't break. Most of the vehicles those came on were capable of way more than 85 mph, and the manufacturers knew they would be ridden/driven faster than that. The 85 mph thing was basically just a sick government joke.