This update backup method is used for automatic backups made through Autobackup. In this process, the data from the previous backup is overwritten with the modified data. This means that there are no backup versions, i.e. accessing older backup versions is not possible.
Files that are deleted from a monitored folder are kept in the backup. If you want to delete these files from the backup as well, then use the delete feature, which can be selected in the Autobackup screen.