If the first group is trying to discourage the second, I would take it as a signal that they expect the second group to fail. The difference between a doctorate in philosophy and a masters is more than added coursework. You spend a huge amount of time failing to succeed at things. You learn your field by failing to succeed. Seemingly brilliant ideas are tested, and fail. You get a good sense of what won't work.
It isn't about being bright. It is about discovering the truth. For my own research, I had to spend tons of hours pouring over bibliographies at the back of articles. Read those articles, then pour over their bibliographies and start over. Although Science Citation Index is wonderful, it only goes back to 1975. A person with a masters degree will not have done that.
You also find you have to leave your field to find what you need. You will find techniques in geology or sociology that are exactly what you need. For example, network diagrams come out of sociology, not computer science. They are very old. You need to borrow and steal from other fields. A person with a masters degree is unlikely to do that.
Finally, all fields deal with uncertainty, but uncertainty is usually not taught below a doctoral level, even in finance. What is usually taught is statistical technique. What isn't usually taught is how that technique can break down. As part of becoming a PhD, you may have to build a new statistical technique.
I wouldn't automatically exclude the second group, but I might do a formal evaluation of the problem they are looking at. Some problems are quite tractable at the masters level, others are not.
Research lead by someone with a PhD often fails. It is less likely to fail when compared to someone with a masters because they have less experience at failure. When I finish this post, I will be writing software and I know it won't succeed, but it will tell me what I need to know to write the next piece of software, that will also not succeed, so that eventually I will (probably) write a piece of software that will succeed. I am using well understood techniques, which is why I know it won't work. I don't yet know what will be future well understood technique, but I am working on it.