What it keeps
Version history lists recent versions of the activity you are working on and lets you go back to one.
Versions are kept on this computer, in this browser. They are not in your cloud storage and they do not follow you to another machine — to move an activity, save it as a file.
Restoring
Choosing a version replaces what is on screen. The version you were on is itself kept, so restoring is not a one-way door.
Important
Clearing your browsing data removes version history along with everything else the browser stores. If an activity matters, save it to a file or to your cloud storage as well.