The Recycle Bin Page (Advanced Site Settings dialog)
WinSCP can emulate Windows Recycle bin functionality on the server-side. The Recycle Bin page on the Advanced Site Settings dialog allows user to configure it.
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Refer to documentation of page sections:
Recycle Bin
When Preserve deleted remote files to recycle bin is checked deleted files are moved to specified remote directory (recycle bin) instead of actually deleting them.
When Preserve overwritten remote files to recycle bin is checked, the remote file is moved to specified remote directory (recycle bin) before being overwritten by uploaded file. The option is supported only with SFTP protocol.
The file, when it is moved to remote recycle bin, is renamed to include deletion timestamp in the filename. For example test.txt deleted on New Year Eve 2018 is renamed to test-20180101-000000.txt.
Deleting the file from remote recycle bin deletes it permanently. The same is true for overwriting it.
Recycle bin is used also for modifications done while synchronizing.
Further Reading
Read more about Login dialog and Advanced Site Settings dialog.