I figured the existing Move option could be used for this, by navigating to the Recycle Bin folder from the File Browser (by typing Recycle Bin in the path), however this actually doesn't work and attempting to set it as the folder will trigger an error.
So in addition to the current option to Permanently Delete, please offer a new option to move to the Recycle Bin.
As far as I know, there's two approaches to do this:
a) Displaying a checkbox next to the dropdown when the user selects the "Delete" option, with the label "Don't delete permanently, Move to the Recycle Bin instead". This has the advantage of not increasing the size of the dropdown.
b) Adding a new, separate option in the same dropdown "Move to Recycle Bin". This will make the dropdown larger; I do like the current simplicity of it. But wording things more explicitly is better for the end user, though. If you go for this, since the dropdown will be larger anyways, maybe rename the existing Delete option to "Delete permanently".
What do you think

Best regards