Theoretically it does not decrease the continuity. However, it practical terms there is often a change in the radius of curvature. In the limit, when the weight is infinite, you will get parametric continuity but not geometric continuity (C but not G).
In this example, when the weight gets high enough, while if you zoom in enough you will still have a continuous curve, it's not going to be suitable for many applications that require smoothness. So, it depends on what you're using continuity for.