Many people encounter sludge when they buy a used car, only to discover it had poor care or no care earlier in its life, and they are now the recipient of whatever problems will ensue. If you suspect your engine has sludge buildup, I encourage you to use an oil with strong cleaning properties, like Mobil 1 0-40, and change it every 4-5,000 miles until an analysis shows the engine to be cleaner. In some cases, engine disassembly is needed to resolve the problem.
If the sludge stays in place in a motor it many not do any harm. The risk is that a sludge clump will break loose, clog a vital oil passage, and precipitate the failure of the engine. It's the automotive equivalent of a stroke.