It can cause the roots to rot/bacteria/mold to grow if it stays wet too long and its unable to dry out. The philo in nature would grow in chunky well draining soil, so that when it rains the water drains quickly so that its not just sitting in wet soil but stays wet for bit before drying before the next rain (The orchid is less likely to rot but id be more worried about the compost burning the plant)

The idea is that you do want it to dry out some between waterings, generally when the first 2 inches are dry… if the soil is very thick and doesnt drain well it can also compact the soil taking longer to dry,