History settings and classic Hangouts
If both classic Hangouts and the new Hangouts Chat are enabled for an organizational unit (OU), the classic Hangouts history on or off settings are used in chats in which participants use a mix of classic and new Chat. For example, if you create a one-to-one message with someone who uses classic Hangouts, the classic Hangouts history settings are used, not the new Hangouts Chat history settings.
If the history settings are different for chat participants of different OUs, the chat conversation can’t be created. This ensures that the settings for each OU are honored.