The answer is the second policy takes precedence, contents in the SharePoint site will retain forever.
When multiple retention policies apply to the same content in Microsoft 365, the retention action takes precedence. This means the item will be retained for the longer of the two retention periods. So, the answer is the second policy takes precedence.
Use the following flow to understand the retention and deletion outcomes for a single item, where each level acts as a tie-breaker for conflicts, from top to bottom. If the outcome is determined by the first level because there are no further conflicts, there's no need to progress to the next level, and so on.
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