It's evil, is what it is.
Exchange creates another log file.
Since these log files are only removed when you do an online backup or when the IS stops gracefully. The circular logging option tells Exchange to use a limited number of 5MB files, recycling them as necessary to conserve disk space. The problem with that approach is that you need a full set of transaction logs to restore your database, so if you enable circular logging you may not be able to completely restore your IS in the event of a crash. The only time it makes sense to turn on circular logging is on a connector server .