Yes, a deleted paper is also deleted from the repository. As proof, consider that when the student resubmits to the same assignment the new submission does not come up as a match for the older, deleted version. If the older version was in the repository, the new version's originality report would show that.
Of course, the instructor can also prevent all submissions to a particular assignment from being stored in the repository in the optional settings on an a TII assignment. I do this with rough draft assignments for example.
