Archiving of local folders?

If you are using POP3, the messages are already local as POP3 stores the messages on your device, not on the server. You don’t need to move them to another local folder. They are already local.

If you want to reduce the size of the folders, you will need to delete messages. The backup is just a copy of those folders.

You have selected for the automatic archiving to run every 364 days - so once a year. If you wait for a year, the first one will start.