Suspend
The person can no longer sign in, mail stops being delivered to them as a working user, and everything already in the mailbox stays where it is and stays readable by your administrators and by anything you have authorised. It is the reversible step, and the one to take the day someone leaves.
Archive
An Archived User licence keeps the account and its data in Google's systems, searchable and exportable within your existing retention rules, without paying for a full active seat. It is the right end state when you need the mailbox kept for a long time and nobody needs to work from it.
Delete
Deleting removes the account and its mail. The deletion flow offers to hand the person's Drive files to someone else, but not their mail. If the mail matters — and for anyone who dealt with customers or suppliers, it does — copy it or export it first.
Before any of them: find out what was in there
Whichever end state you choose, the successor's problem is the same: which of these threads are still open. Offboard reads the suspended mailbox once, checks that it read all of it, withholds anything privileged or personal before any model sees it, and writes the successor a brief with every claim linked to its source. The working copy is destroyed within 30 days of handover. Then archive or delete with a clear conscience.
Related: An employee left. How do you give their Gmail to the person replacing them? · Writing a handover when the person has already left