No, the hard copy remains on your Mac. If you try to delete a local file it gives you the option to delete locally and the option to delete both. If you have lower quality files that have been matched, if you delete these locally you can download at a higher sample rate to replace.
One more detail about that....
If the hard copy remains does it retain all the personally taylored details that I may have changed in any one of the iTunes fields? I have kept the names of the songs to default, but like to change the genres to my own filing system, correct dates to original release dates, etc. Is that kind of information retained or is it replaced by the total default info on the track, at least on the home iMac where it's all stored presently? Thanks for your insight.
I've changed loads of the data, especially genres and can confirm when you delete your local copy of the file, the data remains. You will see a little icloud image to show that the file is available to download once it has been delted.
I assume that your entire local database is replicated in the cloud as it exists on your main computer/Mac and matched songs held in the cloud (that find there way to your ipad/iphone/ipod etc) refernce this when sharing.