@MrNaz It merges the past delta backup into the past full backup. Then it does a delta backup..... then you repeat.... Since you only keep one copy it just keeps merging the delta into the full backup. The delta backup depends on the old full backup existing and being correct.
When it does a "full backup", it does a full backup of the data not just a delta (the changes). That way it does not merge the new full backup into the old full backup (or depend upon any old backups). Doing a full backup is a good checkpoint in case the old data (full or deltas) is corrupted.
So having the retention set to 1 basically means you only have the most current backup saved. With backups every 12 hours you might want to set the retention to 20 so you have about 10 days of backups and every 5 days (10 backups) it will do a full backup. Or set it higher if you have more backup space.