Understanding SharePoint Online Versioning

AutoSave features in Word
AutoSave features in Word

SharePoint Online document libraries keep 500 versions of files by default. The minimum recommended by Microsoft is 100. But why are so many versions kept? The reason is that it leads to better recoverability and underpins features like AutoSave and co-authoring. You might be tempted to reduce the number of versions, but why? I can’t come up with a good answer.

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