Same issue for me. I've been running a 4 tier cascade: source>mirror>mirror>vault [cdot 8.2.2P2]
Labels are set on my snapshots, and xdp snapmirrors worked fine to the vault until I hit 251 snapshots.
I then realized I needed to add sm_created as a rule to the xdp policy on the vault as this is a know issue.
Setting the sm_created rule to 120 then cleaned out all but 120 snapshots.
However, the vault now contains just 120 snapshots based on the replication schedule to the vault from the mirror, so being 3*daily (8hrs), I now have 40d of history.
The issue is we need variable retention, ie. 31d, 12w, 12m. I can find nothing in the doco to se tthis up.
Having set the sm_created rule, it seems the retention is flat based on the replication schedule from the the source mirror copy.
(I have reviewed all avalilable NEtapp support doco, including the links shown above).