How did you go about it when you "moved files to my archive folder"?

The settings for preserving folder structure work when you archive by using the built in Archive function, usually via a toolbar button or by pressing the A key.

If you're moving messages manually by drag and drop or similar, it's up to you to choose the appropriate destination folder.

Thanks for your reply. I'm not aware of the archive function. I tried what you said - highlighting a file and pressing the archive button but the file isn't showing in the archive folder (don't know where it went). I also tried highlighting a file and pressing the A key, same result.

What I did (apparently a manual move?): First I went in to View setting for this account, then Copies & Folders, then Message Archives, then Archive option - where I set it to yearly archived folders and keep existing folder structure of archived messages. I then did a search, highlighted the messages I wanted moved, and set "Move To" to the archive folder. Does this constitute a manual move?

Yep, that is a manual move.

I have had similar issues with Archive which I haven't yet bothered trying to resolve. If you run Thunderbird in Safe Mode does Archive work? Does Archive via a right-click work any better?

When you say the messages don't appear in the Archive folder, do they also disappear from the original folder?

I thought in my case that my troubles might be due to my having disabled the A key method. It seemed to me that a silent and unannounced move to an archive folder was just too disruptive and it shouldn't be possible to trigger it accidentally.