File removal if removed from source

If you follow the create link I posted earlier (then scroll down) you can see that it’s entirely your choice, however there will obviously be more space taken if you keep things for a long time. The manual says:

The retention can be set in 3 ways:
Backups will never be deleted. This is the most safe option, but remote storage capacity will keep increasing.
Until they are older than:
Backups older than a specified number of days, weeks, months or years will be deleted.
A specific number:
The specified number of backup versions will be kept, all older backups will be deleted.

however there are actually two other options now that let you progressively “thin out” the versions that are kept as time passes. One is a pre-set, and the other is a custom setting. New retention policy deletes old backups in a smart way. These are all on create/edit screen 5 under General Options with some help text.

There are no separate retention settings for old file versions and for totally deleted files. What you retain is what you retain. If you’re considering intentional deletion after backup (i.e. long-term archive), please don’t. Duplicati is fine for shorter-term deletion recovery, but it doesn’t have the UI or stability to keep only-copies.