You have a Microsoft 365 E5 tenant.
You create a retention label named Retention1 as shown in the following exhibit.
You apply Retention1 to all the Microsoft OneDrive content.
On January 1, 2020, a user stores a file named File1 in OneDrive.
On January 10, 2020, the user modifies File1.
On February 1, 2020, the user deletes File1.
When will File1 be removed permanently and unrecoverable from OneDrive?
The retention label Retention1 is configured to retain and delete items based on when they were created, with a retention period of 6 months. The user stored File1 in OneDrive on January 1, 2020. Therefore, the file will be retained until July 1, 2020, at which point it will be permanently removed and unrecoverable. The modification and deletion dates of the file do not affect the outcome as the retention period is based on the creation date.
GIVEN ANSWER IS CORRECT
Agree - I couldn't find a good written explanation, but I think the left side of this flowchart explains it. https://learn.microsoft.com/en-us/purview/retention-flowchart
Retention policy is based on when file was created, which was 1 January 2020, retention period is set to 6 months