Messages aren't moved to archive mailboxes after you create a retention policy in Exchange Online
Problem
In Microsoft Exchange Online for Microsoft 365, you use the New-RetentionPolicy Windows PowerShell cmdlet to create a retention policy that moves email messages from a user's' mailbox to the user's archive mailbox. For example, you create a retention policy by using the following series of PowerShell cmdlets.
New-RetentionPolicyTag "ArchiveTag" –Type All –RetentionEnabled $true –AgeLimitForRetention 90 –RetentionAction MoveToArchive
New-RetentionPolicy "CorpPolicy" –RetentionPolicyTagLinks "ArchiveTag"
Set-Mailbox <mailbox> -RetentionPolicy "CorpPolicy"
Start-ManagedFolderAssistant –Identity <mailbox>
However after you create the retention policy, the policy doesn't automatically run. That is, messages that have reached the age limit that's set in the policy aren't automatically moved to the user's archive mailbox.
Cause
This issue occurs if the size of the mailbox in Exchange Online is less than 10 megabytes (MB). The retention policy runs automatically one time every seven days for mailboxes that are larger than 10 MB. However, the retention policy doesn't automatically run for mailboxes that are smaller than 10 MB.
This issue also occurs if the primary mailbox has an associated user account that's disabled, unless the mailbox is a shared mailbox. In this case, messaging records management (MRM) doesn't currently support moving items to the archive mailbox. Microsoft is aware of the issue and is working on a fix.
Workaround
For mailboxes that are smaller than 10 MB, manually run the Start-ManagedFolderAssistant –Identity <mailbox> cmdlet every time that you want to move messages to the archive.
More information
For more information about the Managed Folder Assistant, see Configure and run the Managed Folder Assistant.
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