Once Change Management is enabled, every record will have a new field called _Inactive which will be set to No (False) by default. If a record is deleted (tombstoned) then this field will be set to Yes (True) and the record will be grayed out.

 Keep in mind that if you wish to exclude these records from dropdowns, you will have to add an additional filter to the link field. You will do this in the Advanced area of the field, and change the DbfScript Link to have the _Inactive=False predicate added.

The second thing to keep in mind is that the Change Management only works for single records, not sub-records. If you wish sub-records to be change managed you'll have to enable Change Management on the sub-form also. Changes to those sub-records will be managed separately.