I think the confusion is if "acquisition" in "shall permit the acquisition, retention, and dissemination of covered communications" includes spying. I don't think it does.
I don't think so either. The impression I get is that this covers retention policies for communications incidentally acquired during intelligence operations. A (perhaps poor) example might be, a raid on safehouse that yields hard drive that contains email records, where some of those emails are unrelated communications with a US citizen - it sounds like records like that would now be destroyed after 5 years if there is no specified need to keep them. Sound right?