re :I was trying out Thunderbird, and it showed me a prompt: "Hey, we can archive your emails for you", and I said okay, as space was becoming scarce. It told me in the status bar "We freed up 1GB" which sounds about right.

Thunderbird does not display a message 'we can archive your emails for you'. Archiving just puts emails into the 'Archives' folder as a means of sorting old stuff - getting the emails moved out of the normally used folders into the 'Archives' folder for long term storage - assuming the 'Archives' folder is set up to accept archived emails. It certainly would not save you any space because the emails would be just moved from eg: Inbox' to 'Archives' by you selecting the emails and then clicking on the button 'Archive'.

The only process which would 'save space' would be to perform 'compact'. Perhaps you saw the auto compact popup message which asked if you wanted to 'compact' folders. Compacting only removes old hidden traces of emails that have been previously deleted or moved from a folder. The compacting via this auto method is carried out on all folders. See info at this link: https://support.mozilla.org/en-US/kb/compacting-folders

This means old emails will only be the Archive folder if you selected the email and clicked on 'Archive' or you manually moved it into the 'Archive' folder. They would NOT get put into an Archive folder when you choose to compact folders. No emails are moved to other folders when compacting.

Archives is very small. Perhaps that is correct. You need to ask yourself in what folder did you originally store that email. If you are talking about an Imap account folder, then it can only display whatever is held on server. Check to see if the email is visible on server by logging on to the webmail account via a browser.

Bit of explanation on compacting: When you delete or move an email from 'Inbox', it will appear in the destination folder eg: Trash or a folder of choice. It will no longer be visible in the 'Inbox'. However, in reality, that old copy of email is still in the Inbox mbox file that stores the downloaded emails. But now, it is 'marked as deleted' and hidden. So it is still taking up space in the 'Inbox'. It means recovery is easily done, but after a while all those 'marked as deleted' hidden emails are consuming space in that file and it can get messy. So when you compact, all those 'marked as deleted emails get removed, thus tidying up the file which makes it less likely to get corrupted and saving you space.

If a file is already corrupted then it is possible to lose emails. Corrupt files can occur if not compacted on a regular basis, but they can also occur if computer is closed down suddenly and those files are still open or if Thunderbird is compacting and you exit Thunderbird in mid process. I've also known corruption to be caused by Anti-Virus software scanning files or attempting to fix them. There are many reasons for a corrupted file, but those are the most common. Hence why it is advised you do not let Anti-Virus type products access to profile folders or never allow them to auto fix any Thunderbird file or allow any 'Cleanup' product eg: CCLeaner access to any Thunderbird profile.

If you are using a gmail account: Logon to webmail account via a browser and look in the 'All Mail' folder. Gmail stores everything in the 'All Mail' folder. You only see emails in other folders because gmail applies 'labels' to facilitate a view like normal folders. Gmail auto archive emails in the 'All Mail' folder. Basically, if email has no label applied then it is still in 'All Mail'. You can reapply eg: 'Inbox' label to get it reappear in the 'Inbox' folder.