Polymer 1.0 doesn't use shadow DOM (unless you ask it to). Instead it uses this thing called 'shady DOM', which is roughly equivalent but requires accesses to the DOM to go through APIs.

See here for the details:

https://www.polymer-project.org/1.0/articles/shadydom.html

The difference between the webcomponents.js polyfill and webcomponents-lite.js is precisely that the former includes the shadow dom polyfill.