Litigation Hold migration involves putting a user's entire mailbox on hold for the purpose of retaining it for legal review.
In-Place Hold migration involves putting a subset of a user's entire mailbox on hold for the purpose of retaining only certain types of email.
The only difference between these two types of migration is a query. Litigation Hold can be enabled to hold all items that are deleted or modified. In-Place Hold is set up like Litigation Hold, but adds a filter query to only retain specific kinds of email.
Litigation Hold works like this:
In the normal deleted item workflow, a mailbox item is moved to the Deletions subfolder in the Recoverable Items folder when a user permanently deletes it, or deletes it from the Deleted Items folder. A deletion policy (which is a retention tag configured with a Delete retention action) also moves items to the Deletions subfolder when the retention period expires. When a user purges an item in the Recoverable Items folder, or when the deleted item retention period expires for an item, it is moved to the Purges subfolder in the Recoverable Items folder and marked for permanent deletion. It will be purged from Exchange the next time the mailbox is processed by the Managed Folder Assistant (MFA).
When a mailbox is placed on Litigation Hold, items in the Purges subfolder are preserved for the hold duration specified by the Litigation Hold. The hold duration is calculated from the original date an item was received or created, and defines how long items in the Purges subfolder are held. When the hold duration expires for an item in the Purges subfolder, the item is marked for permanent deletion and will be purged from Exchange the next time the mailbox is processed by the MFA. If an indefinite hold is placed on a mailbox, items will never be purged from the Purges subfolder.