Nagar,
If the Master data value is used in any cube - then it cannot be deleted - what this process will do is to delete all master data which is not used in transaction data.
The only things to be cognizant of is :
1. When you start deletion of master data - you cannot load data to any of the cubes or DSOs which use this infoobject.
2. If your master data deletion gets terminated for some reason - the master data object gets locked and the loads will start failing - there is a table entry that needs to be deleted in order for the data load to continue. I am trying to recollect the same ( it is something like RSDMD or something on those lines ) - you will have to delete this entry for data loads to proceed.