Is not invalidating
When you examine list or library items that have managed metadata entered for them prior to the term set being deleted, Share Point prevents the managed metadata control from being used (the Project Phase column below is greyed out).
However, it is not something you would want to do for 10000 items in a list!
I was constrained severely by time, so I decided to try a quick and dirty approach to see what would happen.
I created a new, clean farm and provisioned a managed metadata service application.
If you have set up your column to use multiple managed metadata entries, as well as allow multiple entries, you will have something like the screen below. Secondly and more importantly, even if we do click it, the term will not be found in in the new term set.
The only way to deal with this is to manually remove the term and re-enter or use the rather clumsy term picker as the sequence below shows.
As you can see we now have no reference to a term set.