Contacts given a grade of F are determined to be undeliverable (and unsafe to send to). If a Contact is given an F grade, the Contact will be unsubscribed from any lists it currently exists on within your Constant Contact account.
The contact will be unsubscribed, but will not be totally removed. You can still locate contacts with F grades under the 'View All Contacts' tab or by searching for the email address.
If you access the individual Contact, you'll see that it has been unsubscribed from any previous lists.