>>Is it a separate Archive Mailbox rather than an Archive Folder? If so, there's an overview of archive mailboxes at https://technet.microsoft.com/en-us/library/dn922147(v=exchg.150).aspx .
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>Thanks, it is still unclear why this Archive1 folder appeared today. To me, this appears to be over complicated. It became more towards that when we moved to Exchange Online. There are some flexibilities we lost when moving to that platform, over specific settings I was able to do before. I see also from months to months, the interface keeps getting changed as this is now controlled at a higher level.

It might be a default policy. For example, if you started using it 2 years ago, and a policy is in place to archive anything more than 2 years old, then an archive might "suddenly" appear.