If the clay (terra cotta) pots are lined, (painted/glazed), there is no real problem other than weight and fragility.

The fine roots worm their way into the tiny spaces in the clay's surface and as Dutch said...it makes it a pain trying to slide them out for transplant.
The clay (terra cotta) can 'breethe' too much, (drying out too quickly) plus it can absorb nutes and salts throwing-off your application rates and soil chemistry. (the clay can act like a sponge)
Also, you have to be much more careful when handling the clay pots, as they are heavier and more fragile than the plastic ones.

But in a pinch, if it's all you've got...they do work. Using a knife around the inside-edge to unfasten the roots before transplant may be necessary, but some might still be attached to the bottom of the pot so care must be taken.
Rusty Trichome Reviewed by Rusty Trichome on . clay pots was wondering why clay pots were bad? Rating: 5