I have got the code for downloading on Demand resources working correctly and I can get the path where the file is currently being stored and can access. My question is if I move the file to another location would the file later get deleted as usual or does it only deletes the files if its in the default folder? I couldn't really find an answer to this question from looking in the documentation. Any help would be greatly appreciated. Thanks in advance
Actually you don't really know where the on demand resources are and you have no direct access to them. The whole thing is kind of a delusion. It will appear to you that they are somewhere inside your bundle, but that is not the case. You can read them but you cannot move them because you cannot access the place where they really are.
And to answer your question, no, if you were able to move them — for example if you copied them to a different location — the copies would not be the on-demand resources and would not be managed by Apple.