To see it in action, go to a course's page as an Instructor and click to edit a content unit.
Below the content, there's a "Version history" tab (1) that you have to expand to see the unit's older versions (2).
The first date is the date the unit was created (3). The last one shows when the last update to the content (4) was made. Only the last 20 versions of the content are stored, so if you keep making changes, the first date will eventually be replaced by the oldest stored version. A new version is saved only when it's been (at least) 5 minutes since the previous one.
To restore a previous version, just select it (5) and click on the "Restore" button (6).
When a previous version is restored, it moves to the latest update position represented by the date of the restoration (7) while the number of versions on the list remains the same.
Note: This feature doesn't work for the following content types: SCORM/TinCan/CMI5, Tests, Surveys and ILT units.