I am wondering how the splunk forwarder agent handles the following scenario.
Let’s say the agent is installed on a windows server and the agent service/application for unknown reason stops. The OS continues to run and therefore log continues to be generated. After a period the agent is up and running again. Will the agent forward events that has been generated while it was down or will it forward logs “on the fly”??
It depends on your log rotation schedule.
If the log file has continued to simply append while Splunk was stopped the forwarder will pick it up from the last check after it's been started and that data will make it's way to the indexer.
However if the data was moved to a different log during that period or was zipped or otherwise compressed Splunk will likely not pick it (depending on your blacklist settings in input.conf).