If you do upload newer version of file - old file will be moved to “versions” directory and will be offered as version to recreate. The same valid for editing, applications, e.g. Note will do a lot of savings and therefore produce versions of the document.
Be careful - older versions are deleted automatically depends on your setup (https://docs.nextcloud.com/server/14/admin_manual/configuration_server/config_sample_php_parameters.html#file-versions):
If the versions app is enabled (default), this setting defines the policy for when versions will be permanently deleted.
The app allows for two settings, a minimum time for version retention, and a maximum time for version retention. Minimum time is the number of days a version will be kept, after which it may be deleted. Maximum time is the number of days at which it is guaranteed to be deleted. Both minimum and maximum times can be set together to explicitly define version deletion. For migration purposes, this setting is installed initially set to “auto”, which is equivalent to the default setting in Nextcloud.