Symptoms
After you enable the dedicated Exchange Hybrid Application feature, items that have a retention tag that's configured as Move to Archive will no longer be automatically moved to the archive mailbox if the archive resides in Exchange Online and the primary mailbox remains on an on-premises server that's running Microsoft Exchange Server.
Resolution
To fix this issue, install the following hotfix updates:
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Hotfix update for Exchange Server 2016 CU23 HU18: September 8, 2025 (KB5066370)
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Hotfix update for Exchange Server 2019 CU14 HU7: September 8, 2025 (KB5066371)
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Hotfix update for Exchange Server 2019 CU15 HU4: September 8, 2025 (KB5066372)
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Hotfix update for Exchange Server Subscription Edition RTM HU2: September 8, 2025 (KB5066373)​​​​​​​