Small issue with retention policies

There can be a number of reasons why the retention policy/tags are not taking efect, in general you can start troubleshooting by making sure the correct tags are applied. If this is a new mailbox or recently migrated one, it might take a while for the MFA to start processing it, you can give it a push via the Start-ManagedFolderAssistant cmdlet. If it's still not working, check the *ELC* properties via:

Export-MailboxDiagnosticLogs user@domain.com -ExtendedProperties

You should have no problems editing default/folder tags, but after those are changed the policy needs to be reapplied/the mailbox reprocessed. For the Deleted items tag, best create a new, non-default policy and assign it to the mailboxes in question. Renaming the default policy should also work, but I seem to recall some instances where the changes there were overwritten...