Unfortunately a rescan didn't do the trick. I believe that it appears to be a permissions related problem.
After further review and playing around I have got to the bottom of it.
Once upon a time when first testing out Veeam and the Data Domain integration, we created a temporary Data Domain local DD Boost user account and this credential was used to connect to the Data Domain from within the Veeam Backup Repository configuration. Later on we deleted this local account and created a new account with the proper naming convention etc...
When Veeam performs a backup (to a Data Domain, unsure if this applies to all repos) the backup files NTFS permissions are set to the backup repository credentials at the time of backup. When this credential is changed at the Backup Repository level and the old account is deleted from the DataDomain, Veeam essentially no longer has permissions to delete the backup files. I could see this when reviewing the NTFS permissions on the backup files as it had a SID for a deleted account.
In order to delete the files, I modified the ACLs on the MTree CIFS share so that a Domain Administrator could access the files via Windows Explorer. At this point I was able to take ownership, add the domain admin user to the folder with NTFS full control permissions replacing the contents permissions and then delete the files. As the MTree replicated the replicated copy also was cleaned up.
I hope that this info helps someone else one day