Active/inactive backup versions are processed the same, whether they came
from an incremental or from a selective backup.

So yes, if you normally keep only 2 versions, and do:


March 1 selective
March 2 incremental
March 3 selective

Assuming the file changed and the March 2 backup DOES send a backup version
to the server:  after the backup on March 3, you have ONLY the versions from
March 2 and March 3.  If the file didn't change after the backup on March 2,
then you have two identical copies.