In online recipes of cheese & onion pasties, they call for raw potato and onion mixed with grated cheddar cheese. I am wondering if the chopped potatoes and onions cook properly in the oven, don't we need to use sauteed onions and boiled potatoes?
The raw potato will definitely cook through. If you cooked the potatoes first, they would be almost devoid of texture by the time they cooked a second time in the oven - you'd have something more akin to mashed-potato pastries on your hands.
You might want to think about sweating the onions first, though. Sweating them would drive-off some of their moisture and would mellow the taste of your pastry filling. Definitely not a requirement, but I think you'd prevent soggy pastry bottoms and serve-up a better tasting treat.
Also, your recipe throws-out the notion of brushing the pastry tops with milk or egg like they are interchangeable. Milk is traditionally used to soften the the crusts of breads - an egg wash will give your pastries a rich brown top. I have never seen a puff pastry recipe that called for a milk wash. Stick with the egg wash - beat a large egg with 1 Tbsp. water and brush the tops of your pastries lightly before parking them in the oven.