There is no downside. Since 3.0.1 is a mandatory patch for online features (Raids, Trades, Battle Stadium), you won't be able to connect to the internet in-game without it.
If you are a competitive player or just want to join Tera Raids without errors, hit that button. pokemon scarlet 3.0.1 update
If you were using any duplication glitches or specific out-of-bounds exploits in Version 3.0.0, do not update yet. The community is currently verifying which exploits have been patched out. Historically, these minor updates kill the "item printer" dupe and the "Koraidon/Miraidon flying out-of-bounds" glitch. Final Verdict It’s boring, but necessary. Version 3.0.1 is the digital equivalent of tightening a few loose screws. It doesn't add new Pokemon, new stories, or new clothes, but it makes the online experience slightly less likely to crash. There is no downside