Removing a file from a folder takes away the shortcut. The document itself is still kept, and you can put it back.
A file in LEAT can appear in more than one project without being copied. What you see in a folder is a pointer at one document, so removing it removes the pointer.
Only a records disposition, and it is a long process on purpose:
At every one of those steps, a preservation order over any item stops the whole batch.
Nothing is deleted. Files stay exactly where they are and stay under whatever retention and preservation rules already applied. What changes is that new files cannot be added.