In the vast majority of instances where an application is removed from Windows Marketplace for Mobile, users of this application will continue to be able to use these applications on their phones. In the rare event an application from Marketplace exhibits harmful behaviour or has unforeseen effects, Marketplace has the capability to remotely uninstall these applications. While we hope to avoid this scenario, we will make refunds available in such cases.
The initial worry was that whenever an application is removed from the Marketplace, as happens somewhat frequently in the iPhone App Store and Android Market, it would be pulled from all handsets. This isn't quite it: The kill switch will only get flipped when something is dangerous, illegal or in some other way a Thing That Microsoft Shouldn't Have Sold You. The rest of the times, the app should be left on the handset. It's CYA for MSFT, more or less.
But yeah, this capability—which remember, both Apple and Google basically have—is sort of disconcerting, since it means that Microsoft can exert immediate control over what apps you have on your phone, without your approval. Well, sort of: Marketplace for Mobile, like the Android Market, is non-exclusive—you can still sideload unlisted or delisted apps without Microsoft's blessing, just like always. [Ars Technica]