Transfiguration is dangerous in MOR, But the type of danger McGonagall discusses is basically the same as any toxin. It's literally only dangerous if you eat it or breath it. ... So why is Mcgonagall so surprised that Dumbledoor used transfiguration in battle, and is still alive?

My guess would be that the danger comes from the battle as much as from the transfiguration. Transfiguration seems to take time and concentration, far moreso than the charms and curses that seem to be the mainstays of battle magic, so odds are it's not generally used in active combat for the same reason that you don't generally dig a foxhole in the middle of a firefight. In support of this, Dragon and Chaos Armies, and SPHEW, have all used Transfiguration onscreen during battles -- but not, to the best of my recollection, in battle.

Combat stress might also tend to disrupt concentration in ways which are dangerous, but that's more speculative.