Allow dynamic retention policy based on group membership
The below is too great a restriction and renders the retention policy useless.
Groups selection confirmation
The specified groups will be expanded so that an In-Place Hold can be put on the mailboxes in these groups. Only the mailboxes that are currently members of these groups will be placed on hold. Mailboxes added to or removed from these groups won't be added or removed from this hold. After setting the group for the location, the new member changes for this group will not auto apply to this location settings. Do you want to expand these groups?
100% agreed. If a retention policy is not going to dynamically support a group (other than initially added members to the policy) there should be integration with Azure AD Dynamic Groups. Let the dynamic groups make the add/remove changes and have the retention policy use the dynamic group members to enforce retention policies. Without this capability all of the automation has to be scripted and maintained.