I did a little experiment to test DropBox's retention practices for deleted files. I created a large unique video file, uploaded it, deleted it and then permanently deleted it. Waited longer than the standard recovery window, over 30 days, uploaded it again and it was recovered virtually instantly with no uploading required. This indicates the server still has a copy readily available, despite it being 'permanently deleted' past the normal recovery time. Of course backup copies need to be kept which can retain files for longer periods but these should not be so readily recoverable.
Unlimited deletion recovery and version history is available with a premium feature called Packrat, it could be that this functionality is enabled behind the scenes for all accounts and includes files that are 'permanently deleted'.
The 'permanently delete' option, accompanied by a picture of a piece of paper being shredded, suggests a destructive operation but that is clearly not the case. It doesn't seem to have much of a purpose other than revoking user access to their files and giving a false sense of security and privacy.
Upload with caution.

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