Backup schedule question

[Egor Yakovlev]

It will create a Full backup on first run, than Incremental Backup on every following days. On Tuesday, when backup finishes, you will have 2 restore points, with Monday Full being older than 1 day, thus Retention will get applied and Full backup will get merged with Tuesday increment and you will see a single Full backup on disk, dated Tuesday. It is called Forever Forward Incremental chain.
/Thanks!

[Egor Yakovlev]

It will merge only Full with next Increment(Monday+Tuesday), not the whole chain, keeping 5 days-old restore point last(Tuesday). Next day, with new increment, retention will hit again and Tuesday Full will eat Wednesday increment, so on. At any point in time you will have 5 days old Full backup with 4 days of increments ahead.
/Cheers!