As first we need to distinguish between data backup and configuration backup. The configuration backup extracts the relevant configuration from the system and makes it part of the data backup. The data backup copies the data on a different medium, it involves the user data and the configuration.
The configuration consists of the user configuration (one or many users) and the system configuration.
The user configuration is mostly stored in the $HOME directory.
The system configuration is stored in different places on the system, not only /etc, it may also involve the set of packages installed by the package manager.
Often both user and system software has a default configuration, often it is shipped with it in the installer package or the software creates it on the first start. It might not be worth creating a backup of such a default configuration. In addition keeping the default configuration in a backup might cause trouble when setting up a new system, which might come with an update software version.
Also for both user and system software there might remain left over configuration, when a software is removed from the system. It might be part of a clean up job to ask the user if such configuration can be removed or if it should be kept for a later use of the software.
To be continues.