The key here is what the data sheet says - "Illogical time and date entries result in undefined operation". That means that if you don't validate the data before setting the chip, the results will be undefined - it may roll over to a correct date or simply keep counting to Feb 31, Feb 32 etc. It is not specified (and may vary depending on exactly where it starts) so the answer is that you need to validate the date BEFORE setting the chip. You don't need a full calendar, an array of months with the maximum day (and you need to determine if it is leapyear) would cover the months, hours must be less than 25, minutes/seconds less than 60.
One of the first rules of good design is to study the data sheet then don't violate any of the specifications. My preference is to stay well away from the limits when possible. You will be much happier with a well behaved project down the road. Really - it is worth the extra effort to get it right in the long run. :)