Disk resize behaviour

The Linode Manager won't let you resize a disk to an amount smaller than the space currently taken up by files on that disk.

So to answer your question it will error out, it will not remove your files.

Ah I see. I'm assuming this is the case for all standard file systems such as ext, fat, etc?

This is specific to the Linode Manager, which only works with ext4/ext3 disks (or swap disks).

To use a different filesystem (FAT, XFS, ZFS, whatever) on a Linode you would need to create a raw disk. Raw disks can only be resized up, not down - because the Linode Manager cannot mount them to determine the amount of free space. With raw disks, you're also responsible for increasing the filesystem size yourself, once you've increased the size of the disk.

I see. Thank you for the info.