This is a very good question Martin. In short, Yes, you will loose depth and sensitivity. The Whites DFX by the way ran in this mode all the time.
The answer to your second question, Just because it is quieter, does that mean totally positive and a good thing? is a common perception among many detectorist. You will find a varying opinion on this subject. On one hand you have a school of thought that the quieter and more rock solid the better. On the other extreme you have those who want to hear everything in the ground, and do quite well. I guess this actually comes down to a preference, and how much noise you can tolerate. I feel that if you crank down your RX, DS, and use BCR, and put on smaller coils in the name of quieting the V3/V3i, then might as well have saved some money and bought a cheaper detector. That being said, there are many different levels of settings that give a full range of sound to choose from. Find one that suits you. I have set the program I use all the time for fellow detectorist and immediately got the response, thats really noisy isn't it? So preference definitely comes into play. I tolerate some noise when I hunt, and feel that I am rewarded with more keepers pulled from trashy areas for this reason.
Jack