What little information I know about the karma system is this: Your karma does affect your character in ways such as some classes needing a particular level of karma like classes that can only be accessed with high karma and cannot be accessed if your karma is too low, and there are attacks that do more or less damage depending on your karma level such as how holy attacks deal more damage to negative karma characters like how Ainz was damaged despite his high magical defense and being level 100 by the holy attack from Dominion Authority who was level 40 (Ainz's character being weak to holy attacks because he is undead was also a factor).

To add on to Kujo's words, the karma value do also affect the monsters a player can summon too.

Ohhh thank you so much kujo with your very clear explanation and also disfigure :D

No problem :)

I believe Karma also works similarly as the "Fame" concept in certain LitRpgs where it influences NPC reaction to characters.