I have a custom bill entity and a row of bill data in this entity has an associated note pdf. When service.Delete is called in a plugin on the bill guid will the associated note also be deleted (ie a cascading delete)?
the cascade delete behaviour is handled by the system configuration, not by a plugin. if you google something like "configure cascade delete dynamics crm" you can find additional results to help you understand it.
If you have a specific scenario where the cascade is not applicable or you want to perform some specific logic (like saving the attachments to another entity prior the deletion) then you need to be more specific, stackoverflow is a community focused on technical aspects in forms of Q&A, there is also Dynamics Community Forums for more generic questions regarding Microsoft Dynamics.