Function shouldn't be impeded at all. The indicator LED for my floor/defrost vent select is toast, but the operation works fine. I'd suggest replacing the bulb, but I know in that section of the HVAC stack is really tricky to get a soldering iron into unless you remove all the plastic guides for the button/switch assembly.
For a LED replacement for the removable bulbs, you're going to have to wait for someone else to chime in, as I dont have any experience with the plug-and-play solutions.
Edit: Using the power of the inter-butz i found out that that small twist in bulb is a 74 style.
T1.5 series LED Twist Lock Lamp
You can also tell if your defroster is working, when you push the button you should hear a relay click on the driver side of the dash (i think, location-wise) And it should automatically turn/click off after 10 minutes.