The preference doesn’t actually do what it says, as mentioned in the original post. Starting with macOS 10.12, it doesn’t always download all the attachments, and even ones that did download (because you viewed the message) may get purged later.

The only time I’ve seen the input switching not work is if there’s another app that keeps forcibly changing the input back to the AirPods. Some games and virtual environments do that. If you contact toothfairy@c-command.com, I can look into what the issue might be on your Mac.

Creating an archive folder does help because then Time Machine can create one hard link for the directory rather than a folder containing thousands of hard links to individual message files.

The archive folder is for Apple Mail, not Entourage. Entourage stores all the mail in a single database so it doesn't matter which folders the messages are in.

Traditionally (and even now in most unices) hard links to directories were not allowed, in order to prevent endless recursive cases. Apple added the feature to HFS+ in 10.5 so that Time Machine could make use of the optimization you describe. There are rules about directory hard links so that pathological recursion still cannot happen: http://lists.apple.com/archives/darwin-dev/2007/Dec/msg00029...