File History or System Image for Third-Party Settings Recovery

Goal: choose a Windows 11 restoration approach that preserves third-party application settings after a device failure while limiting unnecessary replacement of the current operating system.

File History is designed around user folders and libraries. System Image captures the system drive, including installed applications and Windows configuration. The decision is constrained by where each third-party app stores settings: some may use locations outside the folders covered by File History, while a full-disk image can preserve the captured state but also restore it to the image date.

Windows 11 feature availability and backup interfaces vary by release, including 22H2 and later builds, so the applicable options and recovery environment should be confirmed for the target installation. Application-specific backup behavior also varies by vendor.

Which approach provides better coverage for the affected applications, File History or System Image? For apps whose settings fall outside user libraries, is a separate app-vendor backup required? What test restore and comparison would establish that the chosen method preserves the required configuration without discarding newer user data?