If PHP 5.4 breaks my site would it require major repairs to fix it?

Don't blindly do this - use a development server.

Depending on your OS and MySQL version, you may also have to update MySQL. A MySQL update could cause more issues than PHP. The issue is you cannot downgrade MySQL via cPanel. You have to do it manually at the command line and will need a pre-upgrade MySQL backup. If you are not a sysadmin, I don't recommend you attempt this. I don't even let our junior sysadmins do this.

In terms of PHP, magic quotes was dropped in PHP 5.4 and some other functions. Magic quotes was a popular in earlier PHP programs, so that alone could break your app.

The process we use is to setup a cheap VPS server, clone over the site and apache configuration. Test the site. Then upgrade PHP to 5.3 then to 5.4 testing at each phase.

Once complete, you can then update your production system with less risk.

Make sure to make both file level and MySQL backups prior to update.

The biggest risk with legacy apps is that encoding or other data encapsulation may be altered by changes in PHP. If this occurs, then data could be corrupted or entered correctly with no way to back out except reverting to your backups. This is why you need to test all aspects of the site. Test checkout, sign ups, emails, admin functions etc.

While adding some time and costs, you can avoid firefighting and loss revenue in case of a meltdown.

So what you are saying is that it is very possible that upgrading PHP could damage my sites and that downgrading the MySQL later must be done manually.

That leads to a couple questions, please...

1) Wouldn't making a backup of the entire cpanel backup the MySQL too?

2) And if so, wouldn't that also mean that if I had to revert back to PHP 5.2 that I could simply replace everything after the upgrade with the backup thus avoid having to manually downgrade the MySQL?

If you have access to the WHM side of the cPanel account with root level access then yes you can change the versions of both MySQL and PHP individually or at the same time using easyapache when logged in as root to WHM.

And I fully recommend setting up a development environment to do the upgrade for as I've helped many companies & people fix problems from upgrading PHP or MySQL to newer versions and the problem sizes ranged from as easy as replacing a function name to the new version of it to having to recode entire sections of their websites.

Hope that helps.