is to set up friction between two surfaces by forcing them together. Coefficient of friction is based on force not surface area. I like to keep the mating faces tight so I torque them pretty good.

On the other hand, if they should loosen, which mine have never done, they will act more like clevis pins and sheer strength becomes important. I have helped other sailors where the bolts were loose and they sheered off.

I just like the harder steel as an insurance policy if they should loosen. As long as you keep them tight and check them every few months it probably does not matter what bolt you use.

On my Hurth/ZF V drive transmission there is no room to put a nut in to lock the bolt. It is a good idea since you have the room. Putting a SS bolt into a steel hub is no guarantee that it will not rust. After assembling my flex coupling I spray the bolts and the flange with Boeshield T9.