I believe this may be the root issue:
https://admin.microsoft.com/Adminportal/Home?source=applauncher#/servicehealth/:/alerts/MP1085955
Users are unable to use event-based retention in Microsoft Purview Data Lifecycle Management and Records Management
Issue ID: MP1085955
Affected services: Microsoft Purview
Status: Service degradation
Issue type: Advisory
Start time: Apr 17, 2025, 3:30 PM EDT
More info
Users may experience errors in policy distribution status, or events failing to trigger the necessary retention label actions such as deletion or re-labelling.
Scope of impact
Your organization is affected by this event, and any user attempting to use event-based retention in Microsoft Purview Data Lifecycle Management and Records Management may be impacted.
Root cause
A recent change intended to improve a section of infrastructure responsible for Microsoft Purview functionality has degraded this infrastructure and resulted in impact.
Current status
May 31, 2025, 9:08 AM EDT
We've determined that a recent change intended to improve performance to a section of infrastructure responsible for Microsoft Purview functionality has degraded this infrastructure and resulted in impact. We're identifying potential mitigation steps to return the service to full health.
Next update by:
Wednesday, June 4, 2025 at 3:30 AM EDT