I've been reading through the forums and noticed that several users opt to plug the oil bypass.

I'm assuming to plug the sandwich adaptor on a Mark IV assembly (7.4L 330hp) I would just remove and plug reference # 6 on this diagram http://www.marinepartsexpress.com/merc_sch_fs.html

What type of symptoms would result if this valve was removed or failed?

Yes, #6. I used an npt pipe tap and put a plug in them after removing the valve. Been working for years. If the plug fell out or the valve failed oil would bypass the cooler and filter all the time. It is a differential pressure valve and needs the resistance to flow through those items.

Thanks for the clarification.