It�s a global change, so yes, it can have knock on consequences if set much higher.
Worst case scenario - If the timeout is set to say 30 minutes, then when a backup (or backups) starts it will grab a tape drive, and will then attempt to perform a backup for 30 minutes. If it fails, then the tape drive will become available, but potentially that tape drive will have sat there doing nothing for 30 minutes� So it�s a case of trying it out and amending the timeout setting accordingly� Multiply this issue for the number of drives in your environment and it could consume the drives for long periods of time when they could be backing up clients which don�t suffer from the issue.
Advice is to increase the timeout gradually, but the long term fix is to sort out the cause of the timeout, which inevitably will be down to the state of the network�.