File History is a very basic utility. File History only backs up copies of files that are in the Documents, Music, Pictures, Videos, and Desktop folders and the OneDrive files available offline on your PC. As long as that 2GB movie you mentioned was saved in one of these folders, then it will be backed up.
File History Will save a copy of the files in those folders to another location, configured in its settings. It does so in the frequency also set in its settings. Once Windows detects the file has changed, it makes a copy of that file. Windows creates a folder on the drive you selected and creates copies of the files. It renames them with dates in the file name, as well as creates a small database.
Restoration of these files is based on the frequency selected. If you have it set to save copies every hour, and you change the file every second, you would only have made 24 backups of that file in one day.
To answer your last question, they answer would be yes, as long as the file was backed up before it was changed. Again, it all depends on the frequency of backups. It will not keep track of every version of file on change, as that would eat up massive amounts of storage.
File History was really designed for non-technical users in mind. These users were not backing up their data. Microsoft had always provided a backup utility in their OSs, but found non-technical people were not using it. The whole differential, incremental, etc, verbiage scared non-technical people away. File History makes backing up files much easier for the layperson. It is a simple set-it-and-forget-it way of backing up files. However, it is not nearly as powerful as a real backup program.
Best Answer
For anyone who stumbles upon this old post trying to find an alternative to the gui and having to pick exclusions one by one, in the File History configuration folder:
there are two files:
You can manually enter xml for all the folders you want to exclude like this:
All the other includes are fully qualified paths and I am not sure if there is a way to provide a true wildcard but you could script the tags into a listing using a cmd prompt to pick all bin (and/or obj) folders like so
paste them into Excel and fill down this terribly complicated macro to produce the xml without scripting anything: