I know this is not recommended as I asked on the Forum about this before. But I have to say that in my usage I have noticed no slowdown. The advantage of custom icons in my palettes makes them so much easier to use that I have persevered using my custom icons with the thought that I can easily delete them if I ever run into problems. Like I said, so far after lots of use of Keyboard Maestro I haven't noticed any performance issues.
Interestingly @peternlewis replied to a previous post of mine saying if there was any performance issue it would affect the Keyboard Maestro Editor's performance, not the Keyboard Maestro Engines's performance.
As a quick example of how much clearer custom icons make palettes here is a Palette with custom icons:
And here is the same Palette with the default Keyboard Maestro icons:
