Yes, it will cause performance issues. Whether you notice it or not may be a different story.
LabVIEW drawing engine starts at the bottom layer and works its way up. So, it has to redraw the image and then redraw the control when you update the control/indicator.
It's been a while since I benchmarked this on a project, but in LabVIEW 6.1, I looked into why my tests ran so slow, and saw a 10-15% decrease in test time by removing the background decorations I used to make the window pretty. If I didn't show the GUI feedback for the test at all (no GUI windows for each test), I saw a 30% decrease in test time.
You will also find that better video cards will have a positive effect on this, as they redraw the screen faster. In the same benchmark, I was able to outperform the early PXI controllers with a slower PC because NI was using a lower end video chip for their onboard graphics.