In general, daily snapshots followed by a weekly snapshot or a monthly snapshot, etc. will be removed; weekly snapshots followed by a monthly snapshot or a quarterly snapshot, etc. will be removed; and so on.

This is illustrated by the following example.
Assume today is 17 Jan06, and the Advanced Retention Policy is as follows:
Daily: retain for 7 days
Weekly: retain for 4 weeks (the job will be performed on Saturday)
Monthly: retain for 3 months (the job will be performed on 1st of each month)
If “Remove retention files for overlap policy” is NOT enabled:
Then a total of 14 snapshots (7+4+3) will be kept on the server accordingly, i.e.:
(Daily): 10 Jan 06, 11 Jan 06, 12 Jan 06, 13 Jan 06, 14 Jan 06, 15 Jan 06, 16 Jan 06
(Weekly): 24 Dec 05, 31 Dec 05, 7 Jan 06, 14 Jan 06
(Monthly): 1 Nov 05, 1 Dec 05, 1 Jan 06
If “Remove retention files for overlap policy” is enabled:
Then only the following snapshots are kept: 1 Nov 05, 1 Dec 05, 1 Jan 06, 14 Jan 06, 15 Jan 06, 16 Jan 06.

Specifically, the weekly policy overrides the daily policy so 10Jan06, 11 Jan 06, 12 Jan 06 and 13 Jan 06 will be removed. The monthly policy overrides the weekly policy, and 24 Dec 05, 31 Dec 05 and 7 Jan 06 will be removed as well.