Exchange Online users may notice that previously displayed folders that are named Files, Files1, and so on, are now hidden from both Microsoft Outlook for Windows and Microsoft Outlook on the web (OWA). The subfolders of these folders and any messages that are in any of these folders are no longer accessible to users.
This is a known issue that affects certain Office 365 tenants.
The Files folder is a system folder that stores back-end data. By default, this folder and any similar folders that are created by using the Filen name (File1, File2, and so on) should be hidden. However, these folders were previously displayed unexpectedly for some tenants.
If you are an affected user, you were previously able to use Outlook for Windows or OWA to store messages in these system folders. The latest update for Exchange Online fixed this issue by hiding these folders as originally intended. Therefore, you can no longer access items that you moved into these folders or created in these folders.
We are planning to make an additional fix to Exchange Online to enable tenant users to access the items in the hidden Filen folders.
In the meantime, you can use the MFCMAPI tool to move messages to non-system, user-accessible folders. To do this, please contact Microsoft Support for help.