Simple Recovery model is supported. One Identity recommends using the Simple recovery model because Identity Manager creates large amounts of transaction logs, which can lead to space and performance issues.
Other models, such as "Bulk" or "Full" can also be used, but in that case please ensure that the proper resources are dedicated to support those settings. Using the "Simple" model will use less resources (i.e disk space).
Additionally, with versions later than 7, the configuration parameter Common\ProcessState\PackageSizeHDB controls how much data is transferred to the History database. Decreasing this value may help with lowering the size of the transaction logs.