"For one's own good" never means resulting in harm to oneself. "TOO MUCH for one's own good" is what makes it harmful.

In the sentence you provided—“Ann’s boss said she has too much imagination for his own good, though she found it has always come in useful”—the boss is suggesting that Ann's creativity or imagination may be excessive to the point where it could lead to problems or challenges in their work environment. However, Ann disagrees with this assessment, believing that her imagination has always been beneficial and helpful in her tasks. So, in this context, the boss's statement reflects a concern that Ann's imagination could be problematic (the second meaning), while Ann sees it as a valuable asset (the first meaning). This duality highlights how the same trait can be viewed differently depending on perspective! **Is "his" a typo? Is Ann a man or woman? Should it be "her"?

¡por tu bien! it can be beneficial to a person, or a lesson learned.