What happens to downloaded iOS apps after updating to iTunes 12.7?
Those no longer sync with iTunes so you can indeed delete them...

however

If there is a 64bit orphaned or abandoned app that you still use or need that is no longer in the app store. Don't toss it as iTunes manual install (still supported) is the only way you'll ever be able to re-install it if you wipe your phone or move to a new one.