If a peer updates or deletes a file, the older or deleted copy of it is moved to Archive on other peers connected to the share. By default Sync keeps files in Archive for 30 days on desktops and 1 day on mobiles. On Androids Archive is not working for shares located on SD cards though.
Only manual restoring of files is possible.
To open Archive folder right click on the share in Sync UI on desktops and select option "Open Archive:
...or use your file browser to access the hidden .sync/Archive directory within the folder. This is option for Androids as well. Archive is not available for accessing on iOS and WinPhones.
Old versions are marked with an index - the file with the highest index is the latest. The files' timestamp there is the time when file was placed into Archive. Copy or move the necessary version of file out of Archive to the directory where it should be.
You can turn the Archive on and off - this can be done for each folder in the Folder Preferences (Folder options > Preferences). It's not advisable though, since Archive make it possible not to re-sync and re-download the files if they're just renamed or moved around. See here for more details.
ADJUSTING ARCHIVE PARAMETERS
The 30-day default period in desktops and 1 day on mobiles can be adjusted in Sync Preferences. (Sync Preferences > Advanced > Power user preferences > sync_trash_ttl):
Use the field to configure how long Sync should store old files, for example, "30" will stand for 30 days. If sync_trash_ttl (Max Archive file age) is set to zero, Sync will never delete files from the Archive (mind the available disk storage space!).
You can also set the maximum file size to be versioned by adjusting max_file_size_for_versioning parameter.
1 stands for 1Mb, so 1000 means that the maximum file size is set to 1000Mb. Sync won't be keeping version of files which are bigger than that.
Please note that the archive of any folder on THIS device receives an old version of a file only if it has been modified by ANOTHER peer. In other words, if a remote peer changes a file, its previous version will be placed in the archive on your device, however, should you change a file, its older version will appear in the archives of other peers. The files which you delete on the local device, can usually be recovered from the Trash or Recycling bin.
Also note that Sync archive does not provide details on which peer made changes to a file. You can learn this from History.