If an ally leaves the AoE, the effects of Rally will be lost until he/she returns to the required distance from the caster. The effect will then start again without need of re-casting.
The effects of Rally are stackable. However, for example, if warrior B activates Rally within the AoE of Rally activated by warrior A, the effects on warrior B will be reset, resulting in warrior B not having stacked effects even though they are covered by two waves of Rally. To resolve this, simply move warrior B out of the AoE of Rally activated by warrior A, then re-enter. (See also Haste for the similar issue)