File versions help you track changes and progress for a SolidWorks file.
n!Fuze uses a simple, sequential file version system to help you track changes to a file. When you upload a file for the first time, n!Fuze sets the version number to 1. Whenever you or another user uploads a modified version of the file, the version number is incremented by one.
In the case of a file containing other referenced files such as an assembly or drawing, the containing file and all referenced files are set to version 1 when they are first uploaded. If a referenced file is changed and uploaded, only the referenced file's version is incremented. So, for example, version 1 of an assembly can reference version 3 of a part.
Non-SolidWorks files are version-managed, but n!Fuze does not track changes, and therefore each upload of a given file is assumed to be a new version, even if no changes have been made, and files with the same file name are assumed to be the same file.