I believe (at least in excel 2003) that when you reference another workbook in a formula excel creates a link to that workbook even if the formula is later deleted. In 2003 you can view the links excel has created by selecting edit->links. As far as I'm aware these links will be copied with the sheet. If you reference 120,000 different workbooks in formulas then conceivably excel could copy 120,000 links when you copy the sheet after deleting the formulas. This might cause your file size to inflate.
will delete all the links on a sheet, you could test if many links exist by doing something like: