Appending backups while overwriting expired sets
Unfortunately, no, that won't work.  It will keep appending but will leave the expired sets in the same archive.  This screenshot shows a backup archive using your script, set to RETAINDAYS = 2, run once in November (VM trickery) and again today.



I think what you're after is a rolling backup, so assuming this is weekly, then after a burn in period, it should retain 7 old backup sets, remove one and append a new one.

Personally, I would keep a single backup set per file and use the cleanup feature in the maintenance wizard to remove old files; that or a regular Windows Scheduled Task.  There shouldn't be any real need to keep backup sets in a single file.