Understanding local and cloud backup

Automatic cloud backups are created once a night. The 7 most recent backups are kept.
When you want to do “risky things”, first start a cloud backup yourself.

Only in that case you can revert to the state right before the “risky things”

AFAIK there’s no need to perform a factory reset prior to restoring a backup, but I prefer to reset it anyway (clean slate, fresh start).