@Enterprise Architect Azure Backup provides independent and isolated backups to guard against accidental destruction of original data. Backups are stored in a Recovery Services vault with built-in management of recovery points. Configuration and scalability are simple, backups are optimized, and you can easily restore as needed. For quick view on the supported features of Azure VM Back up, I would suggest you go through this document.
- Azure Backup has added the Cross Region Restore feature to strengthen data availability and resiliency capability, giving you full control to restore data to a secondary region. For more information, refer this document.
- You can back up specific files and folders on the Azure VM by running the MARS agent(learn more).Also You can restore files on any machine that has the same (or compatible) OS as the backed-up VM.
- AFAIK, you will not be able to restore the VM at image level.
- The VM will be backed up by using the schedule and retention settings mentioned in backup policy. If retention settings are extended, existing recovery points are marked and kept. If they're reduced, existing recovery points will be pruned in the next cleanup job and eventually deleted.
- Azure Backup doesn't support deduplication. Backup supports the compression of backup traffic. For Azure VMs, the VM extension reads the data directly from the Azure storage account over the storage network. It isn't necessary to compress this traffic.
Kindly revert if you need further information.