Velocity is good for forecasting capacity and identifying trends within a self organizing team.
Although velocity is bad when it's used by management to compare teams or measure productivity, as velocity encourages inflating story points and sacrificing of quality.
Velocity in Agile/Scrum is neutral and is a tool for internal team planning and not a performance metric.
Measuring velocity is only for the team's use and not for upper management to use to measure or compare teams.
When velocity helps the team understand their average, best and worse case performance to make realistic commitments for upcoming sprints then velocity is good as it acts as a guide for self improvement and capacity planning.
Velocity is bad when comparing of teams, gamification, ignoring value, and for quality issues.
Pressuring to increase velocity often leads to technical debt and reduced quality.
High velocity also does not mean high value, and a team can quickly deliver irrelevant features.
If rewarded, teams might inflate estimations or story points to make their velocity appear higher.
And velocity is often misused to judge performance, leading to unhealthy competition.
Velocity should also remain internal to the team and not ever used as a Key Performance Indicator for management.