Lucene has some limitation. That's why Solr plugin is also supported.
First, if you're in a clustered environment, it's necessary to activate memory cache so the indexes will be copied between servers. This requires Multicasting. I've tried using database to hold lucene index but I was getting error when there were extensive updates.
Second, I found that reindexing is not all that great on a live system. It's just not time it takes to index, it that while it's reindexing, somebody else should not execute a reindex also. Found that to corrupt index. (Had several admin and had them doing reindex during the same timeslot.) Likewise, it's probably better to not have extensive updates during reindex.
Will the Lucene index still be updated even if I set the above value or will we be forced to reindex if we change it back (if searching becomes slow or if we need to search by expando values)?
In a clustered environment, server restart (which is necessary to make portal-ext.properties effective) usually implies reindex so the indexes will be same between servers.
That setting only use database for user information. There's a similar property to use database for organization. Other indexes such as document library still would use lucene by default.
Reindexing is often necessary when there is a rogue portlet which doesn't update the index. Had several cases of that too.
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