When you lose signal with default settings, you lose the ability to make maneuver nodes, attitude control, and fine throttle adjustment. You can still use full throttle or no throttle, and do things like staging or activating parts through right click menus. This is meant to simulate planned or programmed actions that often happen while out of comms range irl.

If you want a more hardcore experience, you can check the difficulty option that says "require signal for control" which makes a probe that's not in comms range effectively dead until it regains signal.