As of 6.1, this functionality does not affect incremental backups at all (produced backups are never touched again).
The only place this functionality used for is to determine how long to keep delete VM data in the VBK file for all backup modes which maintain single full backup file on disk (that is, reversed incremental backup, and incremental backup with transform). After set amount of days, block belonging to the deleted VM in VBK should be marked as unused, and be re-used by the new data (without requiring to expand VBK to store new data). This is essential as otherwise, VBK will grow forever - so no amount of days disables this behavior completely.
To retain deleted VMs indefinitely, normally people simply preserve monthly/yearly backups. Please remember that your disk based backups are not intended or designed for long-term retention, and rather for short-term retention and operational restores (30-90 days back typically). For long-term archival, people use tape and dedupe devices to store weekly/monthly backups.