In On-Premises builder installation while the customer is inside builder editing his website, auto-backups are being saved automatically when draft is saved. It happens when the client clicks button "Save draft", "Publish" and "Download backup".
The data of all auto backup is saved in builder installation in website project folder, e.g.: [builder]/data/e/x/example.com/backups (here we assume that domain is "example.com" and the part "/e/x/" is the 1st and 2nd letters of domain name).
By default, auto backups are saved no more than every 5 minutes. The number of auto-backups per website is limited and it saves 50 copies by default. When it reaches the limit of copies it keeps saving them further but with removing oldest copies keeping only 50 newest.
With each auto backup saving, builder saves only data, but not the whole project, thus saving space on disk. 50 copies in total may take slightly more of disk space than the original project.
Default values - interval of 5 minutes and number of 50 copies - can be changed in On-Premises brand configuration to any values. Also there is an option to disable auto backups saving at all.