The content of the file remains accessible to the process that has it open and continues to take up disk space.

... and a new file with the same name (and path) and different content can be created that exists at the same time.

This can be confusing.

"I'v updated that file on the server and it has not taken effect. I'v ssh'ed in and I can see the new version. What is going on? If I reboot that box the phone will start ringing..."