WARNING: Providing on demand retention setting for Hourly policy is deprecated. On Demand retention setting will be ignored.
WARNING: Log_Snapshot value is non-configurable and hence value provided for LOG_SNAPSHOT retention will be ignored.
As bad as it sounds, I'm happy I'm not the only person facing this problem since 4.5. I also had TBD files/snapshots piling up across our SQL environment, and eventually ended up where you are, trying to configure log retention via Powershell.
The resolution for me, which is just a workaround, is I found old policies for DB backups that had "hourly" set for LOG_SNAPSHOT, which was the default setting before 4.5. I have been copying those policies and applying them, replacing these LOG_SNAPSHOT "none" policies. Sadly, one has to be careful about editing these copied policies as SC will re-write the LOG_SNAPSHOT value to "none" even if that wasn't the item in the policy being edited.
I'd have to dig for it, but there is even a KB article I found that states LOG_SNAPSHOT should be set to "hourly" and not "none".