Google Message Continuity User Guide - Manual (Page 4)

If the "Trash" label is applied to a message in Gmail, it is moved to the "Deleted Items" folder in Exchange.
Google never permanently deletes a message in Exchange in response to activity on Gmail. This ensures
that a software bug does not delete important user messages.
Trash Folder
The state of messages in the Trash folder is synchronized between Exchange and Gmail. Soft deletion
and undeletion of messages are supported. This is effectively the same as moving a message from a folder
to the Trash folder in Exchange or changing labels in Gmail.
Hard/Permanent deletion of messages is not supported. If a message is hard-deleted from the ‘foo’ folder in
Exchange, that message is moved to Trash in Gmail and not permanently deleted. If a message in the
Trash folder in Exchange is deleted, this action is not synchronized with Gmail; the message would remain
in Gmail Trash. Similarly, if a message with a Trash label in Gmail is permanently deleted, this action is not
synchronized with Exchange; the message remains in the Trash folder in Exchange.
Moving Messages Between Folders
When a user moves a message from the "foo" folder to the "bar" folder, Message Continuity will remove the
"foo" label from the equivalent message in Gmail and apply the "bar" label. This ensures that the message
appears with the correct Gmail label when the user logs in to Gmail.
User activity on Gmail is also down-sync'ed to Exchange. However, since Gmail supports multiple labels on
messages (Exchange requires a message to be on a single folder), the behavior -- due to application of
labels on messages in Gmail -- may be slightly different from what a user expects. When a label "bar" is
applied to a message that already has a label "foo" (foo could be a system folder such as Inbox), nothing is
done on the Exchange side. This is because the message now has multiple labels.
For messages with multiple labels, Message Continuity requires only that the message be present in one of
the corresponding folders on Exchange. So applying a second label on a Gmail message does not cause
any changes on the Exchange message. However, if the user removes label "foo" from a message that
initially had only labels "foo" and "bar", Message Continuity will move the message to "bar" folder in
Exchange.
In general, Message Continuity ensures that a message with multiple labels on Gmail will be present in any
one of the corresponding folders on Exchange. Also, a message will be moved within Exchange only if
required -- in other words, if it is not already in one of the folders corresponding to the labels in Gmail.
Note: This behavior could be confusing. If you want to avoid this, we recommend that you keep only one
label per message in Gmail. When applying a label, users should use the "Move To" button, which will
remove the existing label, in addition to applying the new label.