Although one should abandon the raft of the Dharma, ONLY abandon it once one has made it to the other shore of liberation. Abandoning it beforehand is tantamount to certain death by drowning.
Well of course. But if it is made into a religion, which one builds a religious identity around and holds as a view, it will never carry one to the other shore of liberation, and will become instead a hindrance. It will exchange bad ordinary "I-my-me" for good Buddhist "I-my-me".
I would further add that Hinayana teachings must be relinquished when turning toward Mahayana, which includes the classical understanding of the Four Noble Truths, Dependent Origination and such. They take on different meanings in Mahayana and are given up before ultimate liberation.
One can practice a fair way with self-view, and in many cases a form of self-view is present in a large number of wholesome mental states. For example, hri and apatrapya.
I am still clear what term used by the buddha you are reading as "religion". And why you seem to think that a "religion" necessarily involves negative states. Despite the statements in the Vajracchedika, there are a huge number of statements where the buddha obviously encourages people to teach the Dharma. Part of a bodhisattva's vows are to establish a desana. One can quite clearly do these without having self-view or other obstructions.
The problem is, the term "buddha dharma" does not usually mean "teaching of the Buddha" in Mahayana sutras, but means "particular qualities of buddhas".
The sutra says: "buddha-dharmas are not dharmas", but the first meaning of the term "-dharma" is different to the second. In effect it is saying "the qualities of the buddhas are not elemental factors of existence".
I don't know about the Sanskrit, but the Chinese actually says "Buddha-dharma" twice. It says the "the so-called Buddha-dharma, is not the Buddha-dharma", rather than saying "the so-called Buddha-dharma, is not a dharma".
Also it is clear from context when it says the Buddha "speaks the Buddha-dharma", it refers to his spoken teachings. Translating Buddha-Dharma into "qualities of the Buddhas" doesn't really match the context of the Sutra here.
It's "buddhadharmāḥ buddhadhannā (sic) iti subhūte abuddhadharmāś caiva te|" plural, for a start. The use of the term "dharma" as "teaching" is almost always singular from what I see. In the Mahayana, the usage of the plural is used in reference to various qualities that are particular to Buddhas, not to other vehicles. eg. the 18 avenika-dharmas, the 10 bala, etc.
But if you look at this whole pattern in the sutra of "X is not X, it is called X", there are some major differences between the Skt and Kumarajiva's translations. Harrison has a good article on this, if you are interested.
Basically, the Skt has a compound X-Y, and states "XY is a-Y, is XY".
The only part negated is the Y, not the whole compound. (There are a couple of exceptions in the Skt sutra, but the vast majority are like this.)
Moreover, the negation is just the prefix "a-". Kumarajiva used 非 and all the other Chinese translators followed him. The other option would have been 無. This is what the Tibetan uses. Both are possible in Skt, though the two are different. The former is like English "not-Y", the latter is English "without Y", or "Y-less".
Most importantly, in the compounds XY, the term which is negated, the Y, is usually a term which in sectarian Abhidharma Buddhism was used as a synonym for a particular kind of elemental factor of existence. eg. dharma, dhatu, laksana, skandha, bhava, dhara, etc.
However, in the compound XY, the term Y does not have this meaning, but a much more basic meaning.
So, the end result is saying that "XY is without any sort of elemental factor Y, but is just XY" in a much more normal linguistic usage.
A buddha-dharma is the sense of a special quality (dharma) of buddhas, but is without any sort of elemental existence (adharma), but it is just called a "buddha special quality".
A merit-skandha is the sense of a big heap of merit (skandha), but is without any sort of fundamental element (askandha), but it is just called a "heap of merit" (punya-skandha).
An endowment of laksana is the sense of having certain physical characteristics (laksana), but is without any sort of fundamental cognitive percept (alaksana), but it is just called an "endowment of physical characteristics" (laksana-sampat).
A world dhatu is the sense of a world system (loka-dhatu), but is without any any sort of fundamental element (adhatu), but is just called a "world system" (loka-dhatu).
Of course, the Chinese, following Kumarajiva's doubling up of the compound XY in the negation, and his type of negation, meant that this gets greatly obscured. The Chinese then had to render the Vajracchedika in much more abstruse ways.
But, if you have a look at Kumarajiva's translation of the Xiaopin Prajnaparamita, you'll find that where this same pattern appears in this text, "XY is Y-less, it is XY", he uses 無. I think that this was a bit later in his translation program, and maybe he got the idea a bit sharper here. eg. chp 1, the definition of a bodhisattva or mahasattva. And elsewhere.
Likewise by translating the term "dharma" here as "formulation of truth". That is just a mistranslation.
Again the Chinese text translated as such is not just "Dharma", but 定法, meaning "fixed Dharma". Again in context of the Buddha "speaking" this fixed Dharma, it refers to a spoken teaching, which is "expressed" and can be "contained", meaning a "formulation of teaching (of truth)".
The Skt says "subhūtir āha| yathāhaṃ bhagavan bhagavato bhāṣitasyārtham ājānāmi nāsti sa kaścid dharmo yas tathāgatenānuttarā samyaksaṃbodhir abhisaṃbuddhā| nāsti sa kaścid dharmo yas tathāgatena deśitaḥ|" The usage of the word "定" is an addition from Kumarajiva. It works in the sense of a "definite factor of existence" too, so it's appearance here from Kumarajiva does not necessarily suggest that the term "dharma" here is "teaching" either, rather than "factor of existence".
The Buddha is saying here that his true teaching is not that which can be "expressed" and "contained" in various speech and practices. Hence later in Chapter 26:"If one sees me in form,
or seeks me in sound,
they are practicing the wrong path,
and cannot perceive the Tathagata."
By context, I don't think it is a mistranslation at all.
What about the other half of the verse?
ye māṃ rūpeṇa adrākṣur ye māṃ ghoṣeṇa anvayuḥ
mithyāprahāṇaprasṛtā na māṃ drakṣyanti te janāḥ
draṣṭavyo dharmato buddho dharmakāyas tathāgataḥ
dharmatā cāpy avijñeyā na sā śakyaṃ vijānituṃ //
Which clearly shows that the verse is talking about the dharmakaya as dharmata, rather than about his "true teaching".
But I think that the biggest problem seems to be the assumption that "religion" always involves attachment and self view. I'm not entirely sure that this is the case.
And it may really help to look at the Skt for some of these texts, rather than relying on the Chinese alone. The Chinese texts will help you understand how the Chinese took it, but that is not necessarily what the sutra was saying in the first place.