If you exclude living individuals, they will not appear on any family page. This may make some family pages unreachable from any other family page. However every family page generated will be reachable from an index page.
For example if the parents of a deceased child are living, and you exclude living individuals, the deceased child will appear on a family page without its parents listed. This creates a “gap” in the flow of your family pages for someone following the parental or spousal links. Such a page would only be reachable through the child’s name in the index.
A similar situation occurs if your GEDCOM file contains individuals that are not associated with a parental or spousal family. GED-GEN generates a family page for the individual, but it will contain no links to other family pages. Such a page is accessible only via the index.