The "Retention Time" is the amount of time in months that events are guaranteed, per contract, to be available for segmentation.
This does not necessarily mean that there aren't any events older than that connected to a user (and therefore visible in their event history), but segments will automatically limit the available time condition for events to that amount of months back.
Example:
It is possible to change the Retention Time, within reason. If necessary, please contact your Customer Success Manager.