What happens to a users data once the user is closed?

Keep in mind that when closing a user, it will affect access to certain user data.

The user’s Inbox, Sent and Deleted items are still preserved within the account. Administrators on the account can gain access to these through User Sharing. Note: The Administrator will not be able to take action on envelopes in the user's Inbox. 
Custom Tags/Fields
These will no longer be accessible to any user on the account once the Creator/Owner is closed.
Users that have templates shared with them and Account Administrators will still have access to a closed user’s templates. If an Administrator needs to delete a closed users templates, they would have to transfer the templates ownership to themselves.
Scheduled Reporting 
Any scheduled reporting provisioned under the user will be deleted. There is not currently a way for administrators to see other users scheduled reporting settings. If your account is reliant on a scheduled report and you are not the sender, you may want to confirm who is before closing the user.

Note: Only Account Administrators are able to report data for all users on the account.