Nothing (well sort of). You can still track all the habits you have created, BUT, some of the features will be "off-limits" if you have more habits (three) than what the free plan allows. The features are only turned off while you are above the limit. Some of the features that are locked are: Changing the habit's schedule and changing the habits highlight color. Don't worry, we'll let you know (and "gently" encourage you to resubscribe) when you hit those points.

You can't. Deleting a habit deletes the history in order to keep the database pristine. If you no longer want to track a habit, just unschedule it.

See the User's Guide for this answer, but in short it pays the server fees. That stuff ain't free you know.