The transcoded content is stored on your Plex Media Server until it is synced to your device; at that point the transcoded version is removed from the Server and located only on your device. At no time is the transcoded content uploaded to the plex.tv servers or anywhere else. The original version of the content will continue to remain on your Server.
The Mobile Sync settings (regarding what to sync) are stored on the Plex servers.
Related Page: Where are sync transcodes stored on my computer?