In Exchange 2007 ,we can use the Content setting for Entire Mailbox folder to process all the folders in users mailbox.
In Exchange 2010 ,Default retention tag (DPT) can be used to process all the folders in the mailbox.
In Exchange 2007 (MRM 1.0) we can block subfolders from processing by using the BaseFolderOnly option.
By default, managed content settings apply to the root folder and all subfolders in an Exchange 2007 environment.
With Exchange 2010 ,the BaseFolderOnly option is not available for retention tag,which means that we cannot block subfolders from being processed by retention tag applied to parent folder.
The only available option is block subfolders from being processed by retention tag applied to parent ,is to apply Personal tags to subfolders..This also applies to any user create root folder in the mailbox.
Important thing to note is In Exchange 2007 since we can create content setting with custom class,we can configure the content setting to process or exclude processing of specific message class.
But in Exchange 2010,DPT by default is configured to process "*" message class and we wont be able to specify custom message class.
We need to rely on end user to apply the personal tag to the subfolders.Since Personal tag applied to one of the subfolder also applies to its subfolders also,it would be better if users organize their subfolders in such a way that there is only one subfolder under root folder like Inbox and this subfolder has multiple folders,so that we can apply Personal tag only to the Inbox\Subfolder such that it is applied to its subfolder automatically.
For example: In order to block retention tag applied to Inbox from processing subfolders FolderA,FolderB and FolderB,user need to apply personal tag to each of these folder using Outlook or OWA. You need to apply the personal tag to any new subfolder you create under Inbox
User can organize their subfolders shown below so that we can apply personal tag to folder Folders,which in turn gets applied to subfolders FolderA,FolderB and FolderB.In this case,you don't need to apply personal tag to any new subfolder under Folder's,the new folder will inherit the personal tag from parent folder Folder's.
Care should be taken if you are publishing Personal tags in the policy so that users can block subfolders from processing, Consider and example ,where we have a policy which has a deletion tag for Inbox,we add a personal tag in the policy so that users can block subfolders from processing. If the purpose of personal tag is to block subfolders is processing,then it would be good idea to add personal tag in the policy first ,so that users can apply personal tag to their subfolders and then you can add the Inbox tag in the policy.