When an item is Moved into Database it is imported and no longer in the external folder. When it is Moved to External Folder it becomes indexed and is placed in the external folder.
The changes are saved in the document. The document can reside either in a Finder folder (indexed) or in the database (imported). In either case, the document and its contents are just like any other document, be it .docx, .ppt. xlsx, .rtf, .psd, and so forth.