It obeys both. TSM deletes the data never, CMOD deletes the metadata after 180 days. If the Expiration Type is Load, then CMOD tells TSM to delete that data, and unless Archive Retention Protection is turned on (a.k.a. System Storage Archive Manager, a.k.a. SSAM), then TSM obeys and deletes that object. If the Expiration Type is Sgement or Document, CMOD just deletes the metadata, and doesn't issue a delete command to TSM, so the documents persist, but are inaccessible because without metadata, searches don't find anything.
From what you describe, this is really, REALLY bad news, no matter how you slice it.
-JD.