Ethylene glycol (green antifreeze) kills the oils calcium which controls the formation of sulfuric acid, hydrochlorc acid, and phosphoric acid, which if left unnoticed may cause engine damage. Never changing your oil also will cause this, because the calcium becomes depleated.
But cavitation will happen long before acid formation.
As far as a newly "rebuilt" engine knocking because the old anti-freeze was still in, that should be taken with a grain of salt. If the engine was truly rebuilt how come there is still anti-freeze in it? I mean cracking the heads and flipping it on a stand will drain it. As would Hot tanking it too get the junk off. The most likly cause of a knock after a rebuild its because of installing the bearing wrong/with out lube or not lubing the oil pump.