In another thread where you were assisting a user, you mention some kind of an automated database recovery that the system can perform under certain circumstances (that's my interpretation of what I read). Could you provide a little more detail?
One of my C-7 hubs locked up a day or two ago and I had to restart it by killing power - I could not get in through the regular GUI or 8081. When it came up, it appeared to me that some system events had disappeared. Could that have been caused by the process you described?
If you download a copy of the hub database, the download process is designed to clean up any corruption\issues in the database. That may be what you're remembering.
Yes, the nightly backup performs a db backup. Excerpt below from the backup page:
These backups are generated automatically and stored on the hub for at least five days. Backups get generated automatically overnight and whenever hub reboots. You will only have one routine backup stored per day. We highly recommend you create and download a backup before making changes to your system (adding a device, app, etc.)