It is absolutely possible to use MM4 and MM5 in parallel, yes. Make sure your library scans are set to either Continuously or At Startup on both installations, so that tag changes from one version are discovered by the other version. Alternatively, if you prefer the manual route, you could do File > Add/rescan... > Scan Now every time you make changes.

I am considering to switch to MM5 but there are some features in MM4 I do not want to do without. This is mainly because I do intelligent tagging with Magic Nodes and other extensions.

Is there a reason I cannot use them in parallel? I don’t mean literally at the same moment, but the one after the other. My idea would be to use MM5 for daily use (play music, modify playlists, tag tracks, rip cd’s etc).
Then I also would like to use MM4 every now and then to run checks and make updates to tags.

The question is how both will deal with changes made to tags by the other MM. I would both want to see these changes, and update their own library accordingly.

My question is actually if these could work? Any pitfalls? Any experiences?