Harmonics cause overvoltage, through resonance and amplification. Zero sequence harmonics are commonly known as triplens and add in the neutral of a 4-wire 3-phase system causing neutral overload and heating. Negative sequence harmonics cause additional losses and heating in motors by producing a magnetic field that rotates in the opposite direction to those driving the motor (positive sequence).
Harmonics is a frequency domain interpretation of a time domain reality, distortions in currents and voltages. Harmonic analysis is a mere analytical tool that helps us understand waveform distortions (current & voltage) that occur in power distribution system. Predominantly digital controls on load draw non sinusoidal currents and hence primary cause of distortions is load. When these distorted currents flow through the transformer (which is a series impedance) causes distortion in the voltage. Most often the distortion in voltage is only a small fraction of the current distortion causing it.
For the voltage distortion (in other words voltage harmonics) to be significant, current distortion (current harmonics) flowing through the transformer should be substantially high. However such occasions are rare but do exist.
7th, 13th 19th harmonics are positive sequence harmonics. Creates swells in the voltage wave form. 5th, 11th, 17th harmonics are negative sequence harmonics. This creates back emf, vibration issues bearing failure in motors. Multiples of 3 or triplen harmonics (zero sequence) increases voltage between neutral to earth in star connected system also neutral heating and are null in delta connected system.
We always view the power triangle in 2 plane in linear load. Where as in harmonic environment (non-linear loads), there is fundamental Hz power triangle as said above. For all the rest multiples of fundamental Hz will also have similar power triangle based on their respective voltage and current in terms of magnitude and direction (towards source or load). Now when you do the vector sum of all these, results in true rms power, voltage and current. Based on the magnitudes and directions some amount of THD power gets nullified/cancelled or get magnified. This magnified power is the system generated loss. For such losses we need to mitigate through harmonic filters.