A head gasket seals the junction between the engine block and the cylinder head, preventing the high pressure from the combustion chambers from escaping and keeping engine fluids (oil and coolant) from leaking into the cylinders or mixing with each other. Its functions are to maintain compression for engine power, separate and seal coolant and oil, and manage heat generated during combustion. 

Primary functions of a head gasket:

Maintains compression: It seals the combustion chambers, ensuring that the pressure from the burning air-fuel mixture stays inside the cylinder to generate power efficiently.

Seals fluids: It prevents coolant from leaking into the oil and vice-versa. It also keeps these fluids from leaking out of the engine.

Manages heat: It helps dissipate the intense heat generated during combustion away from the combustion chambers and cylinder walls. 

Consequences of a failed head gasket:

If the head gasket fails, combustion gases can leak into the coolant, causing the engine to overheat.

Coolant can leak into the combustion chamber, causing steam to be released and fouling spark plugs.

Oil can leak into the coolant or vice-versa, contaminating the fluids and leading to engine damage.

This can result in a loss of engine power, rough idling, and other performance issues.