The main purpose of the Archive feature is to set aside Projects folders that are no longer in use in a separate section (and thus declutter the project list).

The Archive feature is only accessible to Organization administrators 

You can then delete them to free up storage space and reduce synchronization calculations.

When a Folder is archived, it is automatically archived and offloaded from all members' devices of the organization.

You can access the archive option by clicking in the info button on a Folder row in the Projects view:

The archive folders are then stored in a separate section, accessible by clicking at the bottom of the Projects list:

These archived folders can then be unarchived from the info menu of a Folder: