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Increasing the rev limit will need you to be sure that all the engine components are up to the job - you don't need a lube system that can't keep up for example. The engine will generate more heat and have a higher piston speed and ultimately you reduce engine life.
But by being able to rev higher you go faster in each gear and when you shift you're higher in the powerband in the next gear so it is a faster way to get around. That's why race bikes/cars etc rev higher - more revs fills the cylinder more times per minute so makes more power.
Yes there are advantages to using a higher rev limit, but the engine will probably need modifications to do that. A stock Harley is very conservatively tuned, but the usual stage 1 mods (air filter, mufflers and retuned carb/efi) along with a decent cam will probably enable it to rev higher. From that point the sky is the limit.
The negatives with a mild tune are probably close to zero. There is not a simple answer for very high states of tune. What have you got in mind? We will happily help you spend your money!
It is only worth raising the rev-limiter if your bike is still making power past 5500rpm. And the only way to know that is to get it on a dyno and see what the charts say. If the HP is still climbing at 5500, then you can raise the rev-limiter to the 6250 mark and see how it looks after. If you are not still making power at 5500 and the HP is already dropping off, then there is no advantage to raising the rev-limiter.
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