...probably the latter... X-P My most recent copy over of another alt's (call her OldAlt) Friends list to a newb of mine (call her NewbAlt) included NewbAlt from the older alt's list, but, not surprisingly, did not include OldAlt on it. But! I don't recall what, if anything, might happen if I "removed" NewbAlt self from her own Friends list? :-/ Uwk
I've personally never done that. But I would think you should be able to remove it from the list without any issues. But again that is just a guess since I've never done it.
The text file just lists the names and any notes. If you delete stuff out of the text file, it doesn't affect server side Friends or Ignored lists.