A 404 is the error code that a server returns when a page is not found, for example after a deleted or incorrectly typed URL. Single 404s are normal and not a problem, but many 404s on important or linked pages harm the user experience and waste crawl budget.
A visitor who lands on a 404 often drops out. And if another link points to that page, that value is lost. You can catch moved pages with a 301 redirect. Too many 404s also waste your crawl budget, which hits your technical SEO.
Loose 404s are normal and not a problem. It is only when important or linked pages give a 404 that it harms the user experience and SEO.
If there is value or traffic pointing to it, direct them to a relevant page with a 301. If there is no alternative, a 404 may remain.
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