You can't create a Records Center site as a subsite in SharePoint Online

Problem

When you try to create a Records Center site at the subsite level in a Microsoft SharePoint Online site collection that uses the Publishing Portal template, that option isn’t available.

Solution

To resolve this issue, create a Record Center site as a site collection in the SharePoint admin center.

More information

This issue occurs because Records Center sites cannot be created at the subsite level in a Publishing Portal site. This is expected behavior in SharePoint Online.

Still need help? Go to Microsoft Community.