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This works through the Munchkin tracking code and is based off of the user's cookies. If a lead visits your landing page and fills out a form OR clicks a link from your email, they will be cookied and tied to that Marketo ID.
My understanding is that if you delete the ID (Marketo record), then you would no longer be storing that person (and record of their cookies) in your system.
If you send them an email (assuming they are in your Marketo database) and they click on a link, Marketo's Munchkin code will associate that person's browser with that person's identity. E.g., if Bob is sent an email and Bob opens it, then Bob will be cookied as "Bob" and will therefore show Bob's email pre-filled in forms assuming Bob doesn't clear his cookies. Similarly, if Bob forwards an email sent to him and Amy opens it, then Amy will be cookied as "Bob" and will show Bob's email pre-filled in forms moving forward. This is because the email and URL were tied to Bob's email address.