This issue could be due to the retention policies but this could also be caused by litigation hold, eDiscovery case hold. Before proceeding verify the quota is exceeding by running below command

Get-MailboxStatistics -identity <PrimarySMTPAddress> -folderscope recoverableitems | format-table name, folderandsubfoldersize, itemsinfolderandsybfolders -auto

Verify the storage utilization by the “RecoveryItem” folder, A regular mailbox will have a max size of 30 GB and 100 GB for the mailbox that has litigation hold.

We need to make sure to disable deleted item retention and single item recovery for the mailbox until the issue is fixed by executing below commands:

Set-Mailbox <PrimarySMTPAddress> -RetainDeletedItemsFor 0
Set-Mailbox <PrimarySMTPAddress> -SingleItemRecoveryEnabled $false

Once the above steps are completed and verified, continue with below commands.

Get-mailbox -identity <Mailbox> | Select-Object ElcProcessingDisabled.

Set-Mailbox -identity <Mailbox> -ElcProcessingDisabled $False

Start-ManagedFolderAssistant <Mailbox> -Fullcrawl

Wait for 15 mins

Start-Managefolderassistant <Mailbox> -holdcleanup

Wait for 1 hour and then execute the below command:

Start-ManagedFolderAssistant <Mailbox>

After the issue is fixed execute the below commands to re-apply the settings

You will notice the mailbox recovery in about next 30-60 Mins.

Thanks,
WintelAdmin