What is the purpose of the Archive folder?
The Archive folder is provisioned by default for mailboxes on Exchange Online. This is done to enable the one-click archive feature. It is not provisioned for On-Premises deployments by default. If an On-Premises mailbox user wants to use this feature, they can activate the Archive folder by selecting the Archive button in the Outlook desktop client. For more information about the one-click archive feature in Outlook 2016, see Archive in Outlook 2016 for Windows.
Does this issue happen for mailboxes that were present before upgrading to CU7?
Yes. The Archive folder is created as soon as a user connects to a mailbox on CU7 by using the Outlook desktop client.
Is there any workaround to prevent/disable this behavior in CU7?
The behavior cannot be prevented for mailboxes that are on Cumulative Update 7. However, if the customer has a copy of the mailbox database from an earlier CU, they can activate the copy there to prevent the Archive folder from being created on any mailboxes that are not yet affected.
Is it possible to delete the Archive folder once has been created?
The Archive folder is a system-created folder. It cannot be removed from the mailbox.
Will the Archive folder go away after affected mailboxes are on CU8?
No. Mailboxes that already had the folder created in CU7 will retain it.