Hi Dave,
Because it's a bot that's examining the site you need the hreflang & geo-targeting. Algorithms are not perfect, and mistakes do happen, but I am convinced that on the long run you win by staying close to the guidelines (and certainly by putting the benefits of your visitors/customers first).
Personally, I think this whole duplicate content issue is a bit overrated (and I am not only one - check this post on Kissmetrics). In most cases, when finding duplicate content Google will just pick one of the sites to show in the results, and not show the others, unless the duplicate content has a clear intent of spamming. Panda is mainly about thin and/or low quality content, or content duplicated from other sites (without hreflang/geotargeting etc) so I would consider the risk in this case rather low.
There was a discussion on Google product forums which is quite similar to this one (Burberry had a massive traffic drop on it's US site) - and the answer from JohnMu from Google was quite similar to the answer I gave: use geo targeting & hreflang.
rgds,
Dirk