No temporary versions of any docx file are stored by the plugin on your server. The plugin generates the DOCX file on the fly and sends it directly to the user’s browser without storing any temporary files on the server.
However, data that a user enters into your form will be saved as Gravity Forms entry data in your database. If you want to prevent a build-up of data in your database (for example, you may not want to accumulate personal or any other kind of sensitive data), you can set a data retention policy for your form in the [Form] > Settings > Personal Data area. In the example below, entries will be retained for 2 days and will then be deleted permanently, automatically:
