The first question is which version of ModeShape/explorer did you try ? (was it 3.x or 4.0.0.Alpha4). In 4.0.0.Alpha4 the explorer webapp has been basically re-written, so there are significant differences.
Now, in terms of the reference itself, a node which is referenced by another node via a hard reference should never be allowed to be deleted. Since we already have extensive repository tests for validating this, it may be a problem with the explorer webapp.
It is happens since web-explorer caches nodes representations to the browser. But when you will try to save changes the server side will (or at least should) throw an appropriate exception.
The new JIRA opened for this case