This policy setting allows you to set the number of once-per-day history items to be kept for each page. With a 2010 format ...

Office System 2010

This policy setting allows you to set the number of once-per-day history items to be kept for each page.  With a 2010 format notebook, OneNote will automatically store previous versions of the pages in the notebook, and it will also store a recycle bin for all of the deleted pages and sections.

If you enable this policy setting, you can set the number of versions per day to keep.  If you set a value of -1 this will tell OneNote to keep all old once-per-day version history items.
 
If you disable or do not configure this policy setting OneNote will keep a page for the past 10 days every day in the past.

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