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The default in Overcast is to delete after listening and to save only 3 episodes from each subscription, which is quite sensible IMO.

it still seems to...not do this correctly? I have it configured thus but still have to delete 1GB+ of old episodes manually on a regular basis.

Are you sure the episode finished, or did you start another at the end of the episode when it was essentially dead air?

I think I usually just let it run until it plays the next episode, but I'll pay better attention the next time I use the app.