Microsoft Purview data lifecycle management (retention labels and policies) support Azure AD administrative units to scope the set of objects that compliance administrators can manage. Administrative units can be used with data lifecycle management, data loss prevention (DLP), and information protection (sensitivity labels). You’ll need Microsoft 365 E5 licenses (or equivalents) to manage the policies, but that shouldn’t be an issue for the kind of enterprise tenants Microsoft is targeting this functionality at.
https://office365itpros.com/2023/05/08/azure-ad-administrative-units-pv/
