Hello @gryczanu
You are right storing a large number of versions (500+) can impact the performance of backup operations or getting an error but unfortunately it is not possible to keep last three(less or more) versions of one key vault secret.
https://stackoverflow.com/questions/57918580/azure-key-vault-secret-versions-lifetime
https://github.com/Azure/azure-cli/issues/8114
It seems there are no plans to support deletion of individual versions of a secret in nearest future.
As you are planning to add new version of each secret once a week I would recommend you to recreate Azure KeyVault Secret once a year.
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