When you try to create a Records Center site at the subsite level in a Microsoft SharePoint Online site collection that uses the Publishing Portal template, that option isn’t available.
To resolve this issue, create a Record Center site as a site collection in the SharePoint admin center.
This issue occurs because Records Center sites cannot be created at the subsite level in a Publishing Portal site. This is expected behavior in SharePoint Online.
Article ID: 3211857 - Last Review: Dec 27, 2016 - Revision: 1
Microsoft SharePoint Online