Using NetBackup 6.5.6 on Windows 2003. If I deactivate a policy, do the retention periods still apply to existing backup images?
Yes. Backup images get assigned a retention period from the schedule that they are ran from, but from there the retention can only be modified from the Catalog view or using bpexpdate from the command line to modify it.
I recently had a policy that I modified to increase the retention from 6 months to 1 year. I updated the policy/schedules so new backups will get the longer retention, but I also had to go back and increase the retention on all the existing backup images.