It simply get's discarded from what you see by default so for the most part there is no impact until people start looking at the figures more closely.
You can renable it though. For example effective healing done vs raw healing including overheal.
In the second example, the thickness of the line denotes how much overhealing is being done at that point in time.
As for overhealing being a good or bad thing, the waters have been muddied somewhat lately. A little overheal is almost unavoidable unless you want to take risks with mechanics that need players to be topped but for the most part, it's not something you want to encourage but at the same time, it can be played to your favour in certain cases. That's likely a topic for a different thread!