Join Date: Oct 2013
Location: Chilliwack, BC, Canada
Generally, the only real concern is that you have slack (no tension/pull) on the cable when the lever is released. If there is not enough slack, the release bearing will be under load all the time and is not designed for this constant loading.
Add to that the effect on the clutch plate clamping while there is release pressure which is to reduce the clamping of the clutch plates and so reduce the torque which the clutch can transfer.
Too little release clearance is the same as riding with the clutch lever pulled in partially all the time. This will cause increased wear to the release bearing which may or may not be a problem. It may also allow the clutch to slip which has all the issues of glazing, heading, wear, which are obvious.
On the other end of the range, too much slack/clearance, is that the clutch may not release sufficiently when the lever is pulled in. This will be more of a riding problem than a mechanical wear one. How much you can tolerate will control that long before other issues are extant.
Something to think about regarding adjustment is to try to place the slotted opening in the lever adjustment screw in a downward angle so that it does not act as a funnel to gather water and dirt into the cable.
Apologies for posting such basics as I suspect that you already know all this and were asking a higher level question which I missed.