Restoring a backup, and undoing one
A restore replaces your site with the copy inside the backup. Every page, post, user and setting created since that backup was taken is removed. It does not merge, and it cannot merge, because the database is rewritten from the archive.
Undoing a restore
Before a restore begins, the site saves a full copy of everything as it is at that moment and tells you its filename afterwards. To go back, restore that copy. If the safety copy could not be taken for any reason, you are told plainly at the time rather than discovering it later.
Why the button asks you to type a date
A yes or no box gets dismissed by reflex. Typing the backup's date is the one action you cannot complete without noticing how far back you are about to go.
Backups that are not really backups
A backup stored on the same server it protects covers exactly one case: you deleted something. It does not cover the case you actually bought backups for, which is losing the server. Send them somewhere else: a remote destination, cloud storage, or your own computer.
And restore one, once, on a site that does not matter. A backup you have never restored is a hope rather than a backup, and the day you find out is the worst possible day to find out.
Will restoring merge the backup with what is on the site now?
No. It replaces. Anything created since the backup was taken is removed, which is why the safety copy is made first.
Can I undo a restore I did by mistake?
Yes, by restoring the safety copy taken automatically just before it. Its filename is shown to you when the restore finishes.
How often should backups run, and how many should I keep?
Daily, and keep as many days as your storage allows with room to spare. Work out the size of one full backup, divide your quota by it, and keep comfortably fewer than that number, so a growing site cannot quietly fill the space and start failing.