Question about converting Active M365 Mailbox to Inactive Mailbox, for archiving

[OneTechBeyond]

We have a regulatory requirement to keep all terminated employee data on a never expire hold. What would the appropriate process be to be able to save both a user's mailbox data AND their OneDrive data, when converting them to an Inactive mailbox?

Also, if a user account gets converted from an Active mailbox to a Shared mailbox, and the license is removed from their mail Microsoft 365 user account, what happens to the OneDrive data for that user? Does it just get placed in stasis until the Shared mailbox or the user's main Office 365 account are removed from the tenant?

[#2]

@OneTechBeyond 

The  answer to this very much depends on your identity configuration.  If you are cloud only, it's pretty simple, when you delete the account you are given the opportunity to convert the mailbox to shared and grant delegate access to the appropriate people.  You are also prompted to select a nominated user who will receive access to the OneDrive folder for a period of 30 days before it goes.  

If you have hybrid identity and are syncing from your local AD, the process is much different. You delete the AD account, wait for sync, then the O365 account gets moved from Active Users to Deleted Users.  If you then choose to restore the account to Active users, it becomes an in-cloud only account.  You can then delete it again and it will trigger the process above to convert the mailbox to shared and to nominate someone to access the OneDrive content.