No damage, but instant crash of the OS.

Yeah especially on older systems, these kinds of jumpers are more than just setting or unsetting a configuration bit that the CPU checks periodically or at boot. They actually directly enable or disable components (e.g by supplying voltage or not). In this case, it probably enables the cache directly; when the computer boots, it sees it's there and uses its addressing; when you remove the jumper it disables the cache and the CPU may (likely) still try to address the cache RAM that isn't there any more, so it crashes. Kind of like removing a RAM stick while it's on.

Ok so it's ultimately electrically safe to do this, although accidentally using the switch would cause a crash and data loss. I'm ok with that.

Ether it crashes the system or nothing happens.