Yes, is bad in the sense that you can get the channel closed, but if the peer agree to keep that liquidity on his side for longer time, is nothing bad, instead is good for you that you have more inbound liquidity available.

Ok so I had it backwards then. It’s bad when all the liquidity is on the peer’s side (i.e. I have low spending capacity). Is that right?

thebullishbitcoiner

That channel is with all liquidity on your side. This situation is not affecting too much your peer.
The blue channel on top instead, is not favorable for the peer, if is a LSP or the bar owner. In most of the cases they will close that channel.

Balance is the key...

DarthCoin

bitcoin_beginners

Managing LN wallets liquidity

I was thinking you were referring to a situation that’s depicted by the last yellow row where it looks consumed (i.e. there’s close to no inbound liquidity). 