When creating a backup, it attempts to condense sectors through some non-standard proprietary algorithm that shifts addressing and tries to roll it up. It wouldn’t be an issue if when restored it reversed this process, but it does not and leaves holes, gaps, or new sectors altogether in the reconstruction. Because of the spaghetti nature of this, the user can only use their software unless they want to reverse engineer the patented algo.

And, does it do so when you ask it to do a sector-based backup, ie an image, rather than a file-based backup.

The latter is the default since it's more flexible and requires less space when doing incremental backups AFAIK, but obviously isn't a true image.