"Staggered File Versioning" - what does it do exactly?

Feel pretty stupid asking this, but I don’t quite understand the documentation on staggered file versioning

I mean, simple file versioning, trash can and external file versioning are all pretty straightforward but I don’t get the staggered thing.

Can someone please give me an example on how it works? E.g if I create a new file and modify it in the first hour the old version is kept for 30 seconds and then deleted or the other way around?

The older the file, the less versions are kept. Or rather less versions in each window.

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