1. Esri ArcGIS Pro Documentation, "One-way replication": Under the section "One-way replication with the option to use archiving," the documentation states, "This option allows the data in the parent replica to be versioned and the geodatabase to be compressed, removing redundant rows from the delta tables. The changes sent to the child replica are read from the archive tables instead of the delta tables of the versioned data."
Source: Esri ArcGIS Pro 3.2 Documentation, "One-way replication".
2. Esri ArcGIS Pro Documentation, "Create Replica (Data Management)" Geoprocessing Tool: The documentation for this tool describes the archiving parameter. For the ARCHIVING option, it specifies: "Changes are sent from the archive class on the parent. This option is available for one-way replication only. It allows the parent replica's geodatabase to be compressed to state 0."
Source: Esri ArcGIS Pro 3.2 Documentation, Geoprocessing Tools, "Create Replica (Data Management)".
3. Esri ArcGIS Pro Documentation, "Replication and geodatabase versioning": This page explains the limitations of standard versioned replication on compression: "If you have replicas that have not synchronized, the versioning reconcile and post process cannot be compressed. This is because the replica versions are still present to track the changes that need to be synchronized." This highlights the problem that using the archiving option (Option C) is designed to solve.
Source: Esri ArcGIS Pro 3.2 Documentation, "Replication and geodatabase versioning".