That would take too long and too much space. Overnight there are only so many hours. I believe the system works like this:
1. Examines the drive for files that have changed or been added since the last time.
2. Creates a list of those sectors and saves them.
Now:
1. When you realize you just deleted a file you then run the WHS console.
2. Select the machine.
3. Select the back up date
4. Select the volume.
What it does is create a Z: drive on your PC that links to a mirror of your C: drive as it was on 24/03/2022. I believe it does that by recreating the image of the drive based on the sectors that have been changed.
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On my WHS I also have a server drive which has photos, music, copies of the projects folder etc. That I back up to a USB connected hard drive every once in a while if I've added things to that server drive.