Hi @reuvygroovy ,
SubFolder1 & SubFolder2 will never get deleted, despite the fact that their messages will.
To the best of my knowledge, this seems to be an expected behavior as has been mentioned above by michev, rentention policy doesn't affect the folder structure, so the subfolder objects won't be deleted event if they are empty.
If an Answer is helpful, please click "Accept Answer" and upvote it.
Note: Please follow the steps in our documentation to enable e-mail notifications if you want to receive the related email notification for this thread.