The function of a capacitor bank placed at an MCC panel is to provide reactive power to the inductive loads (improve power factor) and raise the voltage according to the system strength and capacitor bank size.
If the MCC loads also contain harmonic current distortion as is commonly produced by variable speed motor drive rectifiers, then a distortion problem can be produced should one of the principle harmonic components fall at or near the natural parallel resonance of the capacitor bank and system. This is common when the capacitor bank is large and the system is relatively weak. In those common cases, there are two practical solutions: (1) install a de-tuned capacitor bank; or (2) install harmonic filtering.
In the case that your capacitor bank is no longer working, you will likely experience higher levels of reactive power being supplied through your main source and the voltage will be running a bit lower at the MCC. If the parallel resonance of the capacitor was excited by the system harmonics when the capacitor was working, then you might very well experience lower voltage distortion levels now that the capacitor is not working which would be an improvement and an indication that harmonic correction might be needed.
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