Does Windows System Image back up disks or partitions?

I have a dual boot system for Win7/Win10 installed on a SSD split into 3 partitions. After booting into Win7, I have B: (System), C: (Win7), and W: (Win10). After booting into Win10, the C: and W: partitions are reversed. (To help keep things straight, I assigned drive letter W: to the OS partition of the system I am *not* booted into.)

I'm confused about what happens when I create a system image via Windows Backup and Restore. All the articles I've read (including the tutorial on this site) say you choose the *disks* you want to include, but the system image tool lets me choose what I know are *partitions*. For example, when I create a system image under Win7, B: and C: are automatically selected. I can also add W: to the image if I want, but it's optional. Again, all three of these partitions reside on the same physical SSD.

So what's actually included in a system image? The individual partitions I've selected, or the entire disk on which they reside? (To add more confusion, numerous articles I've seen discuss system imaging in the context of disk cloning.) The answer is particularly relevant if I need to restore from an image. I might want to restore both Win7 and Win10 (restore disk), or I might want to restore just one of the two (restore partition). Are both forms of restore possible, or will only one of the two work? (As you can imagine, I'm hesitant to experiment here unless I know what will happen.)

Finally, a related question is whether or not system restore will properly restore my dual boot configuration?

Can someone clarify this for me?

Just type
C:\Windows\System32>wbadmin /?
and
WBADMIN START BACKUP /?

In your case I wouldn't do it.
To create an Image is easy. To restore/recover an image from a PE-Environment is tricky. Very tricky!

It automatically selects the partitions required for the os you are currently booted into. You can add others.

You just have to understand the statement from MS, saying that only for full-disk backups third-party solutions are recommended. It makes sense when you have big disks with several partitions. In this forum I have seen 4 TB disks with 6 Partitions.
To understand the Backup and Restore (Windows 7) solution you have to investigate the wbadmin-command. It is reliable and solid and allows you to create a VHDX within some minutes that is bootable as a second parallel DUAL-Boot-OS. After a short REG-Mod even from an USB-Disk.
The new WIN11 24H2 with the new Germanium Kernel works great with wbadmin. Booted from an USB-Disk:



And WIN 12 will have wbadmin as well.
I don't believe in rumors. I believe in facts that can be proven.

Your statement is just based on a guess. Not on a fact. Tell me the Partition {GUID} and I create the Image. Even for a Bare-Metal-Recovery. This is also funny, because you create Restore-Points regularly and tell users not to use wbadmin.