Every reference is checked for retractions and other post-publication notices — each named for what it is, with every notice on record, not only the latest.
A retracted reference is usually identified by someone else: a referee, an editor, or a reader after publication. Better to find it while it is still yours to correct.
Evidence
The retraction is published.
The citing papers stay silent.
Only 1 in 20 citations of a retracted paper says that it was retracted.1 The other nineteen read as ordinary references.
Four more findings, with their populations →Drop a manuscript or a reference-manager export
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What is read appears in the box above, so you can correct it before the check runs.
1. Hsiao T-K, Schneider J. Quant Sci Stud. 2021;2(4):1144–69. doi:10.1162/qss_a_00155 — the study reports 5.4% of citations, which this page rounds to one in twenty.