Explanation:

Box 1: A Recovery Services vault
A Recovery Services vault is an entity that stores all the backups and recovery points you create over time.
Box 2: A backup policy
What happens when I change my backup policy?
When a new policy is applied, schedule and retention of the new policy is followed.
References:
https://docs.microsoft.com/en-us/azure/backup/backup-configure-vault
https://docs.microsoft.com/en-us/azure/backup/backup-azure-backup-faq
A Recovery Services vault is a storage entity in Azure that houses data. The data is typically copies of data, or configuration information for virtual machines (VMs), workloads, servers, or workstations. You can use Recovery Services vaults to hold backup data for various Azure services such as IaaS VMs (Linux or Windows) and Azure SQL databases.
You can use backup policy to configure schedule.
https://docs.microsoft.com/en-us/azure/backup/backup-azure-recovery-services-vault-overviewhttps://docs.
microsoft.com/en-us/azure/backup/backup-azure-vms-first-look-arm