When an interchange arrives at a receive location the configured pipeline will decompose the interchange into one or more messages. Messages are then individually validated by the pipeline but then collected within the EPM (End-point Manager) inside BizTalk. If at any time any message within the collection fails, the entire interchange will be suspended. The suspended message will appear as the complete interchange, not the separate parts.
When a new interchange arrives, and this option is selected on the active pipeline, it is broken down into individual messages and passed through the pipeline for disassembly and validation. When an interchange with bad documents is processed in recoverable mode, the bad documents will not cause a pipeline failure. Instead, they are marked as “messages to be suspended”. After the individual messages have been processed by the pipeline, the end point manager submits all the messages to the Message Box in a single transaction: good messages go to the work queue and bad messages go to the suspended queue.
Failed Message Routing
When a new receive port is created, a property can be set called "Generate error report for failed message". When this property is checked, failed messages will not be suspended. Instead, they will be sent to the message box, and the following additional properties will be set:
By taking advantage of these additional context properties you can now create end-point filters, on an orchestration or sent port, that subscribe to these failed messages.
Microsoft has written a very good document, explaining processing interchanges in detail with example. Click here to download