Actually, there's no need to cap the nipple on the distributor..it's just a hole now. But the nipple on the carb is sucking air which disrupts the fuel air mixture entering the combustion chamber, so that's the nipple (the source of the vacuum) that needs capping.
As far as affecting performance by deactivating the retard, not in a negative way will it affect performance.
Let's say the retard was working and your engine was idling at 900 rpms, then you came along and pulled the vacuum tube off the nipple on the bottom of the carb, and immediately put a plug on that nipple. What you would notice is an increase in the rpms of about 200.
That's because your engine became more efficient with the resultant advance in ignition timing.
But that effect would only be noticeable when the rpms are below approx. 1100 rpms.
Above that, there would not normally be enough vacuum to activate the retard.
The exception to that statement is the amount of vacuum during engine braking, such as shifting to a lower gear in order to slow the car down, but performance per se should not be a factor under those conditions.
Is that long winded enough answer to your question ?