Is it bad to drive with a faulty output shaft speed sensor circuit?

My transmission light came on yesterday so I did a code check and got the code P0720 and P0722 meaning the speed sensor is not working properly. Is it harmful to drive the car with it malfunctioning? I drive a manual transmission 2001 ford focus, I haven't noticed any change in the way the car drives or shifts.

When code check was done was codes cleared? At times fault codes will show up but after being cleared they will not return. I would clear first and if it returns then start checking for problem. Once had car that showed fuel level sensor code, cleared and returned few weeks later, cleared once more and it never returned again.

Yes it can be bad. The output speed sensor measures the speed of the vehicle and sends that info to other vehicle systems. The tcm(transmission control module)uses this sensor to determine when to change gears, adjust the torque converter, and display the vehicle speed.It also tells the anti lock brake system when a wheel is locked and it also tells the power steering system what vehicle speed is so the ps system can determine how much steering pressure to apply. As you can see, this sensor is very important. Make sure the wiring harness terminals are clean and corrosion free and fit tightly when plugged into the speed sensor. Make sure the wiring harness doesn't have a open or short in it too which could also set the codes which are present. If these things are ok, replace the sensor and clear the code

Not on a M/T vehicle!
The VSS (Vehicle Speed Sensor) is ONLY an input for the speedometer, cruise control, and PCM of the manual trans Focus! The PCM sends the VSS signal to the cluster over the Standard Corporate Protocol (SCP) communication network circuits.

TEST:
1. Check for power to the Vehicle Speed Sensor at the transmission on a Green/Red (GR/RD) wire. This circuit should indicate full battery voltage with the ignition switch in the Run position. It is fed from the Power hold relay.

2. Check the Black/Orange (BK/OG) wire of the sensor to verify it is a good ground.

3. Check the output of the sensor on the White/Blue (WH/BU) wire. This circuit should indicate a 0 to 12-volt square wave signal as the front wheels spin.

4. If the WH/BU wire does not indicate a signal with the wheels spinning during condition, check the circuit for a possible short to ground, power, etc. If the wiring checks good, suspect an internal transmission concern causing the loss of signal.

NOTE:
This can be a time consuming job because of the design of the transmission, water sits right where the VSS is and will seize the locator pin and seize the VSS in the transaxle bore making it very hard to remove, soak it down for a couple of days with some penetrating oil!