As stated in the Microsoft Website:
It’s a Windows startup option that uses the most recent system settings that worked correctly. Every time you turn your computer off and Windows shuts down successfully, important system settings are saved in the registry. You can use those settings to start your computer if a problem occurs.
When can we use this option?
You can use this option only if your computer has started and successfully the previous time. The reason is that, when you shut down your computer, important system settings are stored in the System Registry. If you have not shut down your computer properly or your computer did not turn ON successfully, then these settings are not saved in the registry.
What will happen to my files saved in my computer?
Another good thing about this option is, all your files stored in your computer like photos, videos, e-mails etc are not affected as only system settings are being restored.