History settings is divided in two settings.

Max days is the days a versions is saved.

If the setting is set for e.g 60 days, versions of files will be saved for 60 days before it get's deleted on the server.  

Max versions is how many versions of a file you keep.

A file can be saved multiple times during a day, and every version take disk storage.

The setting allow you to clean old versions to clear the data usage.