EGR Disable - Early HDi

[Shawnobi]

Apologies for what is another EGR question, but the minimum search string is 4 letters on the forum.

Wanting to disable the EGR on my 2.0 HDi. I've done some reading around the net which is just making me more confused.

I have an early engine with no air douser it seems. So I understand that I can unplug the blue plug and the ECU will flag a 'soft failure'. What does that actually mean? Will it alter any engine parameters? Why is this a bad idea?

I've also read that I can unplug it and disconnect a vacuum hose, which I believe is the hose with the blue band in my picture. So if I do this and cap it at the hose end (not egr end also?), is this all that needs to be done on my engine?

Thanks in advance.