I just tested the new archive option in Lr Desktop 7.3. Therefore I used edited RAW and DNG files and exported them to my desktop. Both don't show the edits when opened up in ACR or after importing them into LrC. Bummer!
I'm having the same problem with non-raw files. I tested with a Cloud album that had a JPG, PNG, DNG and RW2. When I archived the album, the resulting folder had the same files plus an .xmp for the RW2. When I then opened that local directory in Lightroom Local, I could see the edits on the DNG and RW2, but not the JPG or PNG.