why do hard coatings (AKA: Welded overlays) look cracked?

Because they are!

Welded overlays, such as those applied to the gate and seat plate on SlurryFlo control valves (e.g. PTA Tungsten Carbide, Chrome Carbide, Stellite, etc) are used by many industries to provide wear resistance for demanding applications. 

Due to the extreme hardness of these overlays, it is common to see ‘stress relief cracking’. The surface cracks are normal and occur during the post weld cooling process when internal stresses within the overlay are relieved. In all cases, the base metal (i.e. substrate) is more ductile than the overlay, therefore cracks are quickly blunted and do not propagate into it. 

Much like other types of welding, there is diffusion of the substrate within the overlay, forming a strong metallurgical bond, allowing the overlay to withstand high velocity abrasion and impact without chipping or flaking off.
SlurryFlo control valve gate components have a tungsten carbide overlay.
Tungsten carbide overlays on SlurryFlo control valve components increases performance & service life.
The photo above depicts a welded Tungsten Carbide overlay (applied via PTA process) onto a 17.4Ph [H900] stainless steel gate (substrate material). The observable cracking is normal and does not reduce the performance or service life expectancy of the SlurryFlo control valve; in fact, we can expect the exact opposite!
Fun Fact: 
The brake disc materials on some high-performance vehicles exhibit similar cracking. In order to provide extreme heat dissipation and exceptional service life, these brake discs are made from a matrix of materials such as carbon fibre, graphite and silicon. The thermal expansion cracks (as seen in the photos) develop during the complex manufacturing process which involves heating these materials to very high temperatures.
Brake disc materials on a high performance vehicle exhibiting similar cracking.
The thermal expansion cracks on a brake disc.
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