Recently engaged with redgate support about this and was advised to raise on here.

When changing data retention settings within Monitor and reducing the timeframe, it does free up space within the database but it isn't released.

Adding a routine within Monitor to run a shrinkfile against the database would be an ideal solution, but even adding a button/form within Monitor to set up a SQL agent job to do this in a standardised way would be fantastic as a quality of life, as if you're reducing the retention it's usually going to be because of disk space constraints.