Nobody will force you to take 20% time. Some managers actively encourage their teams to take it; but more often, it's up to the individual to step up and grab.

You can bank your 20% time for up to a quarter automatically. (Or more, with approval.)

There's a pre-approved list that most people's projects fall under. It includes open source work, tinkering, prototype, learning (eg new programming language), teaching, etc. You only need to apply, if you have something special outside of those areas.

You should inform your manager. But that's just common sense.

Your 20% efforts explicitly go into your performance evaluation, so it won't be a negative.

I see it as an opportunity to learn and work with (and from) people, I don't normally deal with.