You can get your Octopus credit refunded (in cash) when you leave. Only auto reload is by credit card, otherwise you pay in cash. Yes you pay a small handling fee when returning an Octopus within 3 months, but it's only US$1 or so. I bet you lose more than that in forex/transaction fees on your ApplePay linked to an overseas credit card.
You can only use the MTR with Octopus, or per journey tickets bought with cash. You can only use buses with Octopus or cash (no change given). The Octopus comes physically in the SIM card, but is otherwise separate, not linked to the phone account, as I understand it; it just makes your phone function like a normal Octopus card.
It takes less than a 30 seconds to get an Octopus card, and less than 30 seconds to hand it back and get the refund. It's not exactly a great hassle. You'd be mad not to do it.
And from what I've seen of iPhones around here, your biggest worry (particularly as a tourist) would be running out of battery - then you're screwed in your preferred mode of doing things.