Let's assume there is a client that makes a lot of short-living connections to a server.
If the client closes the connection, there will be many ports in TIME_WAIT state on the client side. Since the client runs out of local ports, it becomes impossible to make a new connection attempt quickly.
If the server closes the connection, I will see many TIME_WAITs on the server side. However, does this do any harm? The client (or other clients) can keep making connection attempts since it never runs out of local ports, and the number of TIME_WAIT state will increase on the server side. What happens eventually? Does something bad happen? (slowdown, crash, dropped connections, etc.)
Please note that my question is not "What is the purpose of TIME_WAIT?" but "What happens if there are so many TIME_WAIT states on the server?" I already know what happens when a connection is closed in TCP/IP and why TIME_WAIT state is required. I'm not trying to trouble-shoot it but just want to know what is the potential issue with it.
To put simply, let's say netstat -nat | grep :8080 | grep TIME_WAIT | wc -l prints 100000. What would happen? Does the OS's network stack slow down? "Too many open files" error? Or, just nothing to worry about?
Each socket in TIME_WAIT consumes some memory in the kernel, usually somewhat less than an ESTABLISHED socket yet still significant. A sufficiently large number could exhaust kernel memory, or at least degrade performance because that memory could be used for other purposes. TIME_WAIT sockets do not hold open file descriptors (assuming they have been closed properly), so you should not need to worry about a "too many open files" error.
The socket also ties up that particular src/dst IP address and port so it cannot be reused for the duration of the TIME_WAIT interval. (This is the intended purpose of the TIME_WAIT state.) Tying up the port is not usually an issue unless you need to reconnect a with the same port pair. Most often one side will use an ephemeral port, with only one side anchored to a well known port. However, a very large number of TIME_WAIT sockets can exhaust the ephemeral port space if you are repeatedly and frequently connecting between the same two IP addresses. Note this only affects this particular IP address pair, and will not affect establishment of connections with other hosts.