From what I know about medical regulators, (admittedly, not much, as they aren't aviation oriented systems) is that they are basically pressure reducing constant flow systems not designed to handle a shutoff at the nose (and brain) end.

Some may have the capability to regulate pressure on both sides of the orifice, but do you really want to bet on it? Do some research. I personally think that using a medical system in an aviation environment would be kind of like trusting a dentist to pilot an airliner.

Your choice. Spending $1000 (or less for some actual aviation systems) is not that much, unless you value your life and aircraft at a lesser amount.

If the regulating device has an "off" position, I would assume that is designed to actually reduce the flow to zero with no build up of high pressure that may compromise the system. But, as I said, I don't much care about what they do in a medical environment. I fly airplanes, and hopefully won't have to worry about sucking O2 in a hospital bed for some time. Until then, I will pick an aviation system.

It is possible that the medical system you refer to has lines and connectors between the cylinder and the flow regulator designed to handle the pressures, but I just don't know. It may have the diaphragm to ensure the downstream pressure is handled, but once again, I don't know. There are many medical systems out there, and I really don't want to do much research into them.. I know what works, and your mileage may vary.

If you fly in an area where supplemental O2 is not often required, and you don't need it that often, and you are unfamiliar with its use, I think you should be extra careful to examine the capabilities of the system you choose.

I've been doing this for a long time, and I shake my head at some pilots that think it is simple to just get a bottle of welding gas (fine, as far as it goes) and just stick a hose in their mouth. It is a bit more complicated than that.