In relation to the setting "Deduplicate against objects older than n day(s)", the purpose is that new data will be re-baseline and new signature will be written to the backend storage, rather then using the existing signature.
Old Signature will follow the retention rules that is set, and will age out naturally once the associated Backup Job(s) has met aging retention.
So in short old DDB signature in the DDB and Disk Library will age out on an on-going basis (assuming infinite retention is not set).
Also when using this feature, it is acknowledged that additional Storage Capacity will be consumed, as new signature will consume space, while the old signature will need to meet retention before aging out.
Hopefully that helps