The air gap controls the point of contact for the arms. If this is too small, the arms may not roll far enough past center to apply sufficient force to the pressure plate. It will also lower the stall speed of the clutch from where you had it set.

A gap which is too large will cause the arms to tip further and be more aggressive, this will raise the actual stall speed of the clutch because the pressure plate will have to move further to engage.

Additionally, arms too close or too far away will not apply at the desired RPM either. Maintaining this gap within the specs will insure consistent function of the clutch and help prevent possible damage to the unit.