Maybe the reason people think you limit your match options if you apply for both residencies at the same hospital--if you apply for IM and pathology, and that hospital knows you are looking at both (or maybe your home hospital) then they might not take you as seriously. If you apply for IM at 10 hospitals and then pathology at 4 different hospitals (maybe you have a regional need to stay in an area? or only want to do path if its at the best residency then otherwise forget it and do medicine) then technically I am not sure how you get hurt. I think the getting hurt comes from 1. if your letter writers know you are applying for both, they wont think you are that serious (so its probably good to keep it secret) and 2. if a program knows you applied for both in their hospital (technically they might not, I doubt path and IM compare interview lists for example but maybe you would be seen on the interview day?) they might be afraid you'll be flakey/not dedicated during residency/might not take you seriously/be afraid you'll rank them lower than the other specialty in their hospital. In terms of the match algorithm it shouldn't hurt you at all, I don't think--I think its more a matter of politics.