Suppose someone gives me 1 XMR, that I'll call 'A'. That person can now see when that output A they give me is used in a ring signature for a transaction. If I then make a transaction where I send 0.1 XMR, I send that 1 XMR output A and then receive 0.9 in change right? Now how does the tracking of A work now? If I go and make another transaction using the 0.9 in my wallet, will that initial output A once again be used in that transaction?

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1.0 (alice)
└── 1.0 (YOU - output A)
    ├── 0.1 (bob)
    └── 0.9 (YOU - output B)
        └── 0.9 (charlie)

By the time you send to charlie, there are no more funds left in A, so it cannot serve as actual output any more.

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