It would depend on how that ignition was wired into the bike; if through existing factory harness there should be no impact as battery acts as a regulator of sorts.
Maybe not entirely correct
I have been working with excavators and there was a " Shock " valve should sudden pressure increase occur then that valve would open as a safety valve
There was also pressure regulating valves keeping pressure down ..Which if not working could have effectual Consequences.
The enthusiast from the Airplane sectors know this.
Now on an XS 650 the Voltage Regulator has its purpose to limit the Voltage at some chosen point in that wiring system
to ca 14 V When Measured across the battery that is between + and - where minus is ground earth.
But depending on the circuit that same Voltage ( if I get it right ) also goes in to the System as a whole
So the overall Voltage in the system akin to that in hydraulics is what the regulator set it to.
So the factory machine did come with points and a " Stoneage " ignition advance unit and a Mechanical regulator.
It was not so important to have an exact regulator ..The alternator could take a beating but they are generally the top dog in the system
and can take some hits, Generally speaking
So what happens when electronics ,,TCI or other comes on the bike. Yamaha had what I believe is called " Analogue " Electronics.
And Modern day have small Computers inside them " Micro controllers " in them . Digital 0 or 1 and are driven via extremely small current and voltages
The Point ( no pun intended ) is that the modern day electronics might not be able to withstand bouncing Alternator brushes and varying
System Voltage
Say for Example that the aftermarket ignition is designed for 11,5 to 14,4 V
Faulty regulator " Stoneage " type feeding the system 14.8 V the controller is not designed for that
It assumes modern day regulator .
So depending on what is inside code wise and hardware wise.
it can fry of course the higher Voltage with the same Resistance --> More power more heat.
And it is not certain that the program code has a loop
If Voltage is over 14,4 ..> Then do this..
And instead feeds the rest of the code with garbage..
I once had a Boyer Bransden ignition that dropped one cylinder warm days ..with an overcharging stock regulator
Bike ran fine cold but warm not so .I believe it was the over voltage.