Should I use the largest string data type when creating a user defined function which operates on strings?

Question

When creating a user defined function is it "bad" to just automatically use the largest string possible?

For example, given the following UDF, I've used nvarchar(max) for my input string, where I know perfectly well that the function currently isn't going to need to accept nvarchar(max) and maybe I'm just forward thinking too much, but I supposed that there would always be the possibility that maybe an nvarchar(max) would be passed to this function.

By doing something "bad" I'm wondering that by declaring that this function could possibly receive and actual nvarchar(max) am I doing anything to possibly cripple performance?

CREATE FUNCTION [dbo].[IsMasNull] (@value nvarchar(max)) 
RETURNS BIT
AS
BEGIN
    RETURN 
        CASE 
            WHEN @value IS NULL THEN 1
            WHEN CHARINDEX(char(0), @value) > 0 THEN 1
            ELSE 0
        END
END

Answer 1

NVARCHAR(MAX) will affect performance if its a database column. As a parameter to a stored procedure it should make no difference. If at all there is a degraded performance its because of the sheer size of the data and not the datatype.