I would think it would stop because the city no longer fulfils the requirements of the wonder to be able to build it.
I don't think so, city itself is still next to a mountain.
however, you can build MP if you found city right next to Cerro de Potosi (NW that gives +10gpt) since it's counted as mountain for some reason.
Not sure if that was a bug or it was fixed in latest patch, since no other NW counted as mountain.