Auto Archive Settings go by the last modified date, not date received believe it or not. So if an item gets flagged the day it is received it will get archived according to the auto archive settings regardless of whether it is flagged or not. If you flag it later that becomes the last modified date and will archive according to the schedule based on that date. You actually have to open the item and go to its properties and check “do not archive this item” if you do NOT want it archived. Otherwise it will archive according to schedule.This of course is provided the item is in a folder which is set to archive. Not all folders are set to archive by default, you have to set that on each folder.