First marketed in the US in 1953, paracetamol (acetaminophen) is one of the most widely used drugs in Western society, both in over-the-counter (OTC) products and as a component of prescription medicines. Effective in relieving pain and fever, paracetamol is noted for the absence of gastro-intestinal side-effects at therapeutic doses in contrast to the non-steroidal anti-inflammatory drugs. Exceeding the recommended dose of paracetamol (typically 4000mg daily for adults), however, can cause liver damage. Adverse events range from minor changes in liver enzymes to acute liver failure and, in some cases, death.
The toxicity is not due to paracetamol itself, but a reactive metabolite, NAPQI. 
Normally, NAPQI is rapidly de-toxified by conjugation with glutathione, but the pathway can become saturated as a result of overdose, combination with alcohol, or in individuals with polymorphisms in the P450 metabolizing enzymes. Inadvertent overdose can occur through combination of OTC products with prescription medicines.
In recent years, analogues of paracetamol with reduced potential for hepatic toxicity, such as the saccharin derivative, SCP-1, have been described. SCP-1 is rapidly metabolized to SCP-123, which is believed to be responsible for efficacy. Development of such analogues has been hampered by the lack of a cost-effective synthesis, but Louisiana chemists have now described a viable route to SCP-123. The synthesis comprises three steps from commercially available starting materials, requires no chromatographic purification and is amenable to large-scale processing. Full details are published in Organic Process Research & Development.
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But can’t SCP 1/SCP 123 undergo the same reaction with the amide?
I would guess that you are right. Although I haven’t seen any detail on the metabolism of SCP-1 or SCP-123, it may be that the improved window is due to faster clearance. There is reference to greater water solubility of the SCP-derivatives.
In addition to what you have suggested, it is also possible that the highly electron-withdrawing benzoisothiazol ring pulls electrons, through inductive effect, away from the nitrogen of the acetamido group leaving it unreactive to the hydroxylation reaction. The formation of NAPQI is not possible unless the N-hydroxy metabolized is formed. The later is highly electrophilic that the attack by the nucleophilic proteins readily occur.