The 120gr bullet restriction is because of cylinder face erosion experienced with the shorter bullets when shooting magnum loads.
The 342's (.38 Special +P) had a warning to only shoot jacketed bullets when using +P loads, because lead bullets had a greater tendency to jump crimp. I'm sure the 340 is susceptible to the same issues with either .38 Special +P's or Magnum loads. The owners manual does warn to try any loads you plan on carrying and insure that they're suitable.