The functionality of the filter is not necessarily compromised but the water leaking out of the filter is less than optimal. Let me elaborate. The water leaking out of the filter usually ends up underneath the pond liner and often times bubbles up the liner in the bottom of the pond. I have seen skimmers pop out of the ground from the water leaking out of the waterfall filter.
Many times people are fooled when trouble shooting for leaks by seemingly obvious wet areas around the back and or sides of the skimmer. By default the skimmer is improperly identified as the origin of a leak when actually the waterfall is leaking. You see, the water will often travel under the stream, under the pond and then makes it's way out under and around the skimmer!
I can't tell you how many times I have identified leaks in waterfalls or streams for both contractors and consumers after they have taken out the time and energy to replace the seal on their skimmer face plate, unnecessarily!

Additionally, erosion under a stream from the constant flow of water from a leaking waterfall filter can make accent boulders in waterfalls settle and compromise the water tight seal on the filter.
More importantly, a small leak in a waterfall filter not only makes the cost of your water bill increase but the constant addition of new water into your pond can stimulate undesirable algae in a big way. You see, tap water is typically full of nitrates, phosphates and silicates that stimulate algae growth. In a balanced eco-system pond nitrates, phosphates and silicates are used up by the system via aquatic plants, bacteria bio-films and such. However if the pond is constantly receiving new water and in turn new nitrates, phosphates and silicates, (because of a leak) the eco-system has a difficult time balancing and algae tends to go crazy!
Out Of Control Algae is
sometimes a tale tell sign of a leak! This is a tricky statement and I use it with EXTREME caution because everyone's interpretation of "Out Of Control Algae" is very different. I have been to "Out of Control Algae" visits on peoples ponds and upon arrival I thought the pond looked absolutely stunning with little to no algae at all! Sometimes a simple bio-film layer of algae on the rocks is considered "Out Of Control" to some.

Now I am starting to digress from the original topic. sorry.
Happy Pondering,
The Pond Digger