WordPress.org

Will existing links to my site that used the full category hierarchy still work?

Yes, WordPress will still serve the category listings and posts regardless of whether it is of the full category hierarchy format or just the single category format. But do note that WordPress doesn't perform any sort of redirects; it responds directly to the category/post URL requested.

Could this give the appearance that I have duplicate content on my site if pages are accessible via the full category hierarchy permalink format and the single category permalink format?

Whether this plugin is active or not, WordPress treats both types of category links the same. This plugin will however issue redirects for all of the non-canonical category and post permalink pages to point to the single category link version.

What can this plugin do for me if I don't use `%category%` in my custom permalink structure?

In addition to handling custom permalink structures (used to generate permalinks for posts) that contain %category%, the plugin also shortens category archive links. WordPress by default generates those links in a fully hierarchical fashion which this plugin will reduce to a single category. See the Description section for an example.