Hi @A_Learner
If you have given the retry count when creation of Queues or in Config file. Then it will retry based on your retry count.
If you got the system exception in the Process state, it will retry based on your retry count. In the retry it will not retry the activity which failed, it will start retrying the same transaction item from the Initialization.
In the Set Transaction status xaml there is a close application activity which close the application before returning to the Initialization state if transaction item getting retry.
Check the below image for better understanding,
In the below image you can check if transaction item got system exception then it will go to Initialization,
Hope it helps!!