Merge Operations

Can anyone explain to me exactly what happens on backend storage during merge operations and retention in Veeam?

My current understanding is that incrementals are merged into the existing chain after we’ve hit our set retention and then a new full is essentially generated on the backend storage. This requires backend storage equivalent to the size of the to-be-merged full + the original full that is still on disk. Is this true? If so, is there any way of doing this where I don’t require essentially double storage every time?