How do I ensure a document/folder is not automatically deleted after retention label period lapses?

Hello All,

I have retention label created in M365 compliance centre, which appears as document metadata (As expected) in the document library as shown below

One of the objectives is that the below retention label needs to appear at a folder level (one level up), rather than at document level. 

The desired outcome is that once this 3 years has lapsed, the folder should NOT be automatically deleted. It should be manually actioned by user (and the documents underneath the folder)

When I created this retention label, here are the sequence of screens I went through ( I did not see the option that says "do nothing") when retention period lapses

here is the retention period setting screen

Here is the screenshot below that I have question about. Where is the option that says "dont do anything" after retention period lapses? It seems like I dont have that option here (Is it a setting that I need to enable somewhere?)  . My goal is to have control over manually deleting documents (while respecting retention policies) without automatic deletion occuring.

So my 2 questions here in this post are : 

1) How do I apply this retention label to a folder (instead of individual document level)?

2) In the last screenshot above, how do I enable the option to "not do anything" (After retention period lapses)?