Doping of traditional semiconductors has enabled technological applications in modern electronics by tailoring their chemical, optical and electronic properties. However, substitutional doping in two-dimensional semiconductors is at a comparatively early stage, and the resultant effects are less explored. In this work, we report unusual effects of degenerate doping with Nb on structural, electronic and optical characteristics of MoS₂ crystals. The doping readily induces a structural transformation from naturally occurring 2H stacking to 3R stacking. Electronically, a strong interaction of the Nb impurity states with the host valence bands drastically and nonlinearly modifies the electronic band structure with the valence band maximum of multilayer MoS₂ at the Γ point pushed upward by hybridization with the Nb states. When thinned down to monolayers, in stark contrast, such significant nonlinear effect vanishes, instead resulting in strong and broadband photoluminescence via the formation of exciton complexes tightly bound to neutral acceptors.