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I have SharePoint Online. I am a global administrator and I have a site with a subsite. On both the Site and Subsite, I have setup the Content Organisation feature so I can setup Drop off libraries.

On both the Site and Subsite, I have

Allow rules to specify another site as a target location

in the Content Organiser Settings

Content Organiser Settings

I have then tried to create a rule to send from either the Parent to the Subsite OR the subsite to the parent (tried both for debugging purpose) but there is no way to send to another site.

I have tried to put the value in manually, and also waited 24 hours incase it needed to propagate the settings, I'm still unable to do it

It just says

A valid target path must be selected.

to whatever value I put in

On Subsite trying to send to Parent

Am i missing something?

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You need to go to SharePoint Online Admin Center->Records management, create new connections to both parent site and subsite, wait for some time and check again.

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