This week I needed to remove all users from a tenant that was created by Microsoft because their domain was not yet added to our tenant and the users started to use Power BI with there email address. So I needed to become the owner and remove everything to add this domain to ours. Because of this new tenant, I got some tips in the admin portal because of first use. Here I got this tip when I opened one user to remove it.
After clicking on Delete user, I got a screen that showed me the type of licenses the user had and what to do with the data in Exchange and OneDrive before the data is permanently removed from the tenant.
Here you have the option to give someone else access to the OneDrive and/or email before the data is permanently removed.
When a user is placed under legal hold, the option to give someone else access is not possible as you can see in the screenshot below
You will only see this when you remove one user. When you select multiple you are not able to assign someone else to all that data.