When deleting a transformation from the Transformations web interface or the Admin API, all associated derived images are deleted as well.
Therefore, currently you can delete transformations only if up to 1000 derived images are associated to this transformation.
Named transformations that are already associated with many derived images are protected from deleting or updating. The reason for this protection is the fact that it's not trivial to delete many existing images when a transformation is deleted (and to invalidate cache copies if already delivered through the CDN).
If you still need to delete a transformation, please contact us