Users attempting to delete SharePoint Online files assigned Microsoft 365 retention labels are blocked. That is, until a change arrives in November to make SharePoint Online and OneDrive for Business behave in the same manner. It’s a good change because it avoid the scenario where users remove retention labels to delete files, which undermines the organization’s compliance strategy. Now, deleted items go into the preservation hold library and stay there until their retention period expires. My only complaint is that the control over the mechanism is not as simple as it should be, but that’s a small and relatively unimportant flaw in the overall scheme of things.
A change being made to SharePoint Online in August will make the deletion process for files with retention labels consistent with OneDrive for Business. The intention is to achieve consistency across the two browser interfaces and to remove a little friction for users who might become confused when they SharePoint Online stops them deleting labeled files. Everything will happen in August. We wonder if anyone will notice?