It is easier to answer the what happens part.
Since your XRD never leaves your wallet, your XRD is not at risk. Slashing is not yet implemented (follow discussion here: Does Radix implement slashing?). You will not receive any staking rewards after all, and your XRD will just hang there until you unstake.
I believe that there will be a slashing mechanism implemented later, so strict sanctions will be there. But as of now, a regular XRD investor (staker) doesn’t have to worry.