In the strictest terms (and according to a number of CASA FOI's and AWI's) anything that is not 100% completely in it's original serviceable state has to be endorsed on the MR. This includes a ripped seat cover, a wobbly glove box door, chipped paint or a broken map/reading light etc.
I know of an AWI that pinged a poor 300 hour pilot for having a ripped roof lining. It was not hanging down or obstructing the cabin, just a small rip probably cause by a fishing rod or something similar. The AWI made it very clear that it was a defect and needed to be endorsed on the MR.
Going by current trends, it would seem that if your aircraft is not in 'just out of the factory' condition then it must have defects. This standard is being set by CASA FOI's and AWI's all around Australia. Would bet anyone serious money that with this I could MR every aircraft in the country. The conspiracy theorist in me thinks that CASA is positioning itself and the regs in such a way that they could and can target anyone that gets in the way, i.e. making it technically impossible to comply with the regs.
Lets also not forget that if there is any open entry on the MR the aircraft can not fly, it is grounded. Why do people insist that a pilot can ignore a defect written on the MR?
Just to recap with a real world scenario: Your dropping some fishermen off to a remote fishing camp 400km from the nearest city, when one of your passengers rips the seat with the metal button on the back of his jeans as he climbs out of your 206/207/210. Your now grounded, its a defect. This defect needs to be endorsed on the MR and it needs to be cleared by an engineer or an OMEL. If thats not possible, you then have to get a flight permit from CASA to ferry the aircraft back to your maintenance base.
Good Luck!