What do I do with surplus Relics from a maxed dragon?

You lose nothing: Relics for a dragon already at maximum Star Rank automatically convert into Relic Shards.

You spend those shards at the Market on:

• buying back Relics for another dragon you want to raise,
• buying Cores (🔵 Rare / 🟣 Epic / 🟡 Legendary) to upgrade Habits,
• buying Hatchery keys.

In other words: the surplus from a "finished" dragon funds another one's climb. That's why you should never fear pulling duplicate Relics — they feed your progression elsewhere. Just remember to swing by the Market now and then to reinvest your shards.