Entire PC backup equals volume level backup with all the volumes included. One volume is failing and that’s just a recovery partition, so it’s safe to exclude it from the backup source.
Assuming the restore points are referring to the amount of full/incremental backups correct?
Yes. To be absolutely on the same page take a look at this help center article - Backup Retention Policy
hat determines when a full backup is taken, because it seems sometimes I can have two full backups end up on my backup (NAS) for one endpoint.
The only backup mode VEB supports - forever forward incremental. It means that you will always have one full backup at the beginning of backup chain, the rest restore points are incrementals