It's either low refrigerant or a compressor clutch that wont hold. I had both issues with 850 and here's what I did:

Low refrigerant: I topped mine off once per year with a variety that had a stop leak sealer added. After doing this a few times it fixed whatever small leak there was and I haven't added any since.

Compressor clutch: I researched this for some time and found a bunch of home brew ways to "shim" the clutch. Unsure if these would really work I broke down and had the mechanic drop the subframe and adjust the clutch correctly.

Now the AC works great and doesn't cycle on and off in short intervals. It was around 100F here a few weeks ago and it blew cold with no musty smell.

Good luck!
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Zack 94' 850 Turbo Wagon (232k)

If it is cycling quickly - like on and off every 2-3 seconds, it may just be low on refrigerant.
I wouldn't be too concerned that it feels humid when not pushing out cold air.
Loss of some refrigerant over time is normal.
If the shim fix doesn't do anything, it may be worth investing in a can of refrigerant and see what happens.

Run, doesn't run, isn't much of a clue. If it 'works' when the engine is cold and stops after warm up, then I suggest looking at the compressor clutch. 3 exterior shims might be all that is needed if the clutch gap is approaching .040

If you son is not a klutz, lightly pushing on the clutch plate with the engine running and not delivering cold air should engage the clutch. Beware of the belt!

Shimming the clutch is quite easy after removing the splash pan.
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My back feels better when I sit in a Volvo seat