IPhone – Do deleted iPhone photos remain in the iCloud

Photos of a shared stream can only be deleted by the owner thereof. Once deleted, this photos will be automatically deleted from any device of anyone subscribed to the stream.

The photos you've previously saved to the Camera Roll, for instance, won't be deleted, though.

Apple’s solution is to manage your storage for you. Under Settings → Photos & Camera, select to Optimize iPhone Storage.

As long as you have enough local storage, photos will remain on your device. When your iPhone needs the space, high-resolution versions of your photos will be removed from your iPhone; all that is kept then is thumbnails, until you decide to view the photo again.

At that point a device-optimized version of the photo is downloaded from iCloud. A full-resolution version won’t be downloaded until you decide to edit or share the photo.

iCloud Photo Library is a photo-sync service, rather than a backup service, which is why deleting a photo anywhere deletes it everywhere. What you see on your device is what you see in iCloud is what you see on all your devices connected to the service.