Normally when I setup Office 365 for my customers, I remove this tag from the default policy…. because you always have that one special user that uses two folders.. the “inbox” folder and the “deleted items” folder…. and they often go back to the “deleted items” folder looking for something weeks later. (Uggg)
Microsoft says now:
We are instructing the system to ignore the 30 day delete tag on the Deleted Items folder if the retention policy’s name is “Default MRM Policy.” This is why changing the policy name will ensure that the tag continues to work. We are not removing or disabling the tag.
Previously deleted items would disappear after being in that folder for 30 days.
Read more about this change here:
OFFICE BLOG: Extended email retention for deleted items in Office 365