A team is just a name, a team lead, and a set of members. The team lead always counts as a member, even if you don't add them to the list. Everyone on a team can see who else is on it, with their email, the track and level they're assessed against, and who they report to, under Your teams in the sidebar, where the teams you lead are marked Lead. What it does is give that team lead the My Reports view over everyone in it — it's how you tell the product who reviews whom, in bulk rather than one person at a time.
Creating a team
From Organization → Teams, New team opens a small form: name, team lead, an optional parent team if you want teams nested under other teams, and the members. Add anyone not already on the team; remove them with the × next to their name. Nobody is notified when a team is created or changed. This is structural bookkeeping, not something that shows up in an inbox.
Reporting lines vs. membership
Joining a team makes the team lead someone's reporting line, unless they already have a manager set individually. A team is a default, not a rule: you can still hand-set an individual's manager separately, and that setting wins. Removing someone from a team only breaks the reporting line the team was providing; a manager set directly on the person stays untouched.
That's why My Reports's roster is built from reporting lines, not team membership. If someone's missing from a manager's My Reports, look at the reporting line first, whether it comes through their team or is set directly on their record.
Moving someone
Changing a person's team or manager carries their whole record with them: closed reviews, focus areas, evidence, all of it, to whoever manages them next. Nothing is dropped or reset by a reporting change.
Deleting a team
Deleting a team doesn't delete anyone in it. It removes the reporting line the team was providing, so nobody in it can start a new review until they're placed somewhere again. Closed reviews are untouched either way — history doesn't depend on the team still existing.