ConceptIn MSCRM, there are three primary ways that you can remove a lead from your views. You can deactivate the lead, disqualify the lead, or delete it. Each of these actions has slightly different implications when that lead is synced to a Pardot prospect. Here's more information about what Pardot does, so you can make the best decision about how to handle bad leads in MSCRM.
Deactivating a leadWhen a lead is deactivated in MSCRM, the lead becomes hidden from the user's default tables. The intent is that if you have a list of qualified leads, and you discover that one of them is not actually a real person, you can hide them. Marking the lead as deactivated in MSCRM will remove them from your default tables, will make the lead read-only if you do happen to have a direct link to it, and will remove the lead from your search results.
If the lead is linked to a Pardot prospect, we will continue to sync with that deactivated lead (this is because deactivated leads are still editable through the API, which is how Pardot accesses them). However, because the lead is deactivated, the updates Pardot makes to this lead will not show up in your default tables. You can always click the "view in CRM" link that Pardot provides on the prospect record to see the deactivated lead in MSCRM. If the lead is worth reactivating, you can do so by clicking to manually reactivate the lead in MSCRM.
It may be possible to define workflows in MSCRM that reactivate leads after they have met certain criteria. However, Pardot does not reactivate leads that have been deactivated in the CRM.
It is possible to view the status of a lead/contact as active or inactive in Pardot. If you have a prospect in Pardot, but cannot find it's counterpart in Dynamics, it may because it is deactivated. By following the instructions in the article, "Viewing "Active" & "Inactive" Prospects in Microsoft Dynamics CRM," you can easily distinguish those leads/contacts based on their status.
Disqualifying a leadIf a lead is marked as disqualified, the lead is hidden from some default user tables in MSCRM, but not all. The lead is still editable in the MSCRM interface and via the API, so Pardot will continue to sync with it even though the lead is marked as disqualified.
It may be possible to define workflows in MSCRM that re-qualify leads. However, Pardot does not re-qualify leads that have been disqualified.
Deleting a leadIf a lead is deleted in MSCRM, Pardot is no longer able to see the lead. MSCRM does not give any indication that a lead is deleted, so there is currently no way for Pardot to know to stop attempting to sync with that email address. The next time we try to sync with that email address, our standard syncing process will first look for a contact, then a lead to sync with. Since we won't find a contact or a lead to sync with, we will create a lead. Deleted leads in MSCRM will be recreated the next time Pardot attempts to sync the prospect that was tied to this lead.
The best way to avoid recreating deleted leads in MSCRM is to unassign the corresponding prospect in Pardot at the same time the lead is deleted in MSCRM. Because an assigned user is required to create a new lead in MSCRM, any attempt to sync up an unassigned prospect will fail to create the new lead. The best use case for deleting leads in MSCRM is when more than one lead exists with the same email address. Once the lead synced to Pardot is deleted, we will attempt to find a lead or contact with that email address in MSCRM--we will then begin syncing with that lead, rather than the lead that was deleted.