Estimate versioning allows you to either manually capture a snapshot of your estimate at a point in time or automatically capture a snapshot of your estimate when shared via the client portal (Pro & Teams only).
It's similar to what many users do now in copying an estimate when making a major change to it, the difference is versioning doesn't create a new estimate unless you need to look back on earlier versions.
See this video for how to manually create versions.
See this video for how it will automatically create versions when sharing the quote via the client portal.