Hi Lee,
If you create a deal in back-end, you can choose any image you have in your images folder. CMGroupBuying doesn't create partner's folder automatically in this case, because you can always change the partner of each deal.
When partner creates deal in front-end, he can only see the images which belong to him (in his folder). When he uploads new images, those images are automatically uploaded to his folder.
The folder of the partners are always created in the folder you provide in configuration ("Folder for partners's images" in "General" tab).
When deal is expired or not available yet, the images are not deleted, because the deals can be still accessed in front-end by visitors or search engines. Partner can always use the same image for many deals.
Regards,
Hung