See discussion at: http://moodle.org/mod/forum/discuss.php?d=191275#p865867

Summary:

The 'Automated backup storage' setting. That was set to 'Specified directory for automated backups'. The 'Save to' setting was left black, which is ok, since the help message says 'Full path to the directory where you want to save the backup files
(leave blank to save in its course default dir)'. Therefore the backups were nicely saved in the 'Course backup file area', but it also caused the deleting of old backups not working anymore. Apparently if you set a 'Specified directory for automated backups', the automatic removing doesn't work.