If I have a file or directory that is a symbolic link and I commit it to a Git repository, what happens to it?
I would assume that it leaves it as a symbolic link until the file is deleted and then if you pull the file back from an old version it just creates a normal file.
What does it do when I delete the file it references? Does it just commit the dangling link?
Git just stores the contents of the link (i.e. the path of the file system object that it links to) in a 'blob' just like it would for a normal file. It then stores the name, mode and type (including the fact that it is a symlink) in the tree object that represents its containing directory.
When you checkout a tree containing the link, it restores the object as a symlink regardless of whether the target file system object exists or not.
If you delete the file that the symlink references it doesn't affect the Git-controlled symlink in any way. You will have a dangling reference. It is up to the user to either remove or change the link to point to something valid if needed.