Having the battery at 100% and charging constantly can reduce lifespan of it so conservation mode just limits it to 60% to counteract that problem. It does not harm the laptop, quite the opposite really. If you want to unplug the laptop to bring it around somewhere you may want to turn conservation mode off before doing so to allow it to reach 100%.
Basically as long as you keep the laptop plugged in all the time, conservation mode is recommended.
Empirical evidence has shown that the closer a lithium ion battery is near its maximum charge the more likely a chemical reaction will take place known as lithium ion plating. At near maximum capacity charge the lithium will start to combine together and form plates and when that happens those lithium ions can no longer hold a charge so the maximum capacity of battery starts to decrease. I believe I've read the more lithium ion plates there are the faster other lithium ions will combine with those that have already formed plates.
Conservation mode restricts the battery charge to 60% to help prevent the formation of lithium ion plates. When you know that you will be using the laptop away from the AC outlet, then at that point you override conservation mode and allow the battery to be charged to 100% capacity.