It could be a good thing. Gaza and the West Bank are currently neither one thing or another. Sort of a state (treated as a state signatory in the ICC panel report) and sort of not (where Hamas are treated as non-state actors in the same report). Ambiguity is never a good thing in law.
But what does it mean to recognise a state when the territory boundaries aren't clear? It's a legal definition, and international laws are generally specific about whether something is within the State's territory or not, so how would that work for areas under dispute like Jerusalem? I guess it's similar to Kashmir - although other countries don't get so involved in that.
And what other actual legal consequences are there to Palestine being recognised as a state - and by who? It was interesting reading the ICC panel report (which I thought was very good and very clear) to see them differentiate between international and non-international armed conflict (and to be clear about why this is both). It doesn't seem that Palestine being a recognised state would have changed that report's conclusions.
Military retaliation against recognised states is obviously still a country's prerogative, and charging foreign nationals for laws broken within the country is normal (although Palestinians breaking the law in Gaza/West Bank should no longer be in Israel's remit until they attacked Israel. But would Israel really be willing to wait until then, after October 7th?).
One downside is the loss of the incentive for Palestinians to engage in peace negotiations. But that isn't going too well anyway.
In the end, everything both sides want is still to be negotiated, and doesn't really come down to statehood.