From July 1 it is required to use the legal hold type called ‘Litigation Hold’. More information is available in this Microsoft article.
The ‘In-place hold’ may be removed from a future version of the product.
As a further update to this, Microsoft have published a change to this:
“We’ve postponed the July 1, 2017 deadline for creating new In-Place Holds to make a mailbox inactive. But later this year or early next year, you won’t be able to create new In-Place Holds in Exchange Online. At that time, only Litigation Holds and Office 365 retention policies can be used to create an inactive mailbox. However, existing inactive mailboxes that are on In-Place Hold will still be supported, and you can continue to manage the In-Place Holds on inactive mailboxes. This includes changing the duration of an In-Place Hold and permanently deleting an inactive mailbox by removing the In-Place Hold.”
Note: Confer with Microsoft to determine whether the terms of your licensing agreement are impacted by this feature.
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