Time Machine backup query

Yes.

Eventually, an old file that made the back-up to TM, but that you at some point deleted off your main HD, will be erased. TM gives you a nice buffer, in my case about a year and a half, but it does not perpetually archive (depending on size).

Two caveats...
My TM will tell me when it has reached it's max capacity and that it is about to delete an old back-up; no surprises.
You can always use a larger HD for your TM that allows back-ups to be retained longer.

 

No. If you delete a file from your primary drive, eventually it will disappear from your backups as room is made for backing up existing files. This is how ALL conventional backup systems work that perform incremental snapshots. If not, over time your backups could grow too large to manage conveniently, eventually running out of space for fresh updates in order to hold on to stale data.

What I would recommend is you buy as large an external backup as you can afford. At least twice the size of your primary drive if not larger. This will allow old, deleted files to be kept for a longer period before TM has to remove them to make room for fresher data.

If you have important data that needs to be maintained indefinitely, even after removing it from your primary drive, you should consider a long-term archival process.