An orbit would be involved and as you say an ever decaying orbit until the gravitational force tore the matter into pieces. How would it convert to energy. Say in the case of a planet. I would imagine it would tear apart, then the resulting parts would spread out and out untill the planet was no more than countless atoms spinning faster and faster riding the accretion disc into the event horizon.. Any thoughts on what from there.
And yes in all the simulations I have run creating extreme gravity in a small area and sending particles at it almost always resulted in the particles being flung out into the universe or falling directly in. Depending on the vector at which the particle comes into contact with the gravitational field of the black hole some were caught into a highly eccentric elliptical orbit.
I might make it my personal mission to calculate the orbital velocity and period at a close range to a black hole.
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