Hi @Jason
Thanks for reaching out to the Microsoft Q&A forum.
Based on my research, the default MRM retention policy does not include a Deleted Items tag. In my testing, the tag does not remain saved after being added to the default MRM retention policy. I attempted this both through PowerShell and through Microsoft Purview, and the behavior was the same. This explains why, even though you assigned a Deleted Items tag to the default MRM policy, it still does not apply correctly, including for newly created mailboxes.
Furthermore, the Deleted Items tag is a retention policy tag that applies only to the default folders. It does not automatically apply across the entire mailbox.

With that in mind, I recommend creating a custom retention tag that deletes email after the period you prefer. When creating this tag, please remember to select “Automatically to entire mailbox (default)” so the tag can apply to all items throughout the mailbox.

After creating the tag, you can add it to your default MRM retention policy.
Once the policy is updated, you can manually trigger processing by running the following PowerShell command:
Start-ManagedFolderAssistant –Identity UPN
References:
I hope this helps clarify the situation and guides you toward the next steps.
If you have any updates or additional questions, please feel free to reach out.
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