Does iCloud backup merge or overwrite?

Question

The following happened today (it was six AM my time, so yeah, I was dumb and dropped stitches in this process):

A friend had a problem with her iPhone and needed to reset it. Unfortunately she did the reset while connected to iTunes and the restore process kicked in. In my sleepy state, I told her to go ahead. She did, and restored the most recent local (iTunes) backup (from July last year - she doesn't back up often, as she has an Air which is pretty full). During setup on the phone, she was prompted to merge data with the iCloud copy, and did so. There was no "restore from iCloud" prompt.

Obviously I should have made sure she was disconnected from iTunes before she did the reset, or had her set it up as a new device and then restored from iCloud, but water under the bridge now. (Side question: could I have had her disconnect and then restart the phone again and avoid this whole process?)

The question is: was the "merge" that happened in this process a true merge, or a replace? Her passwords for Mail were wrong, since they were the old ones from the old backup. If she does the wipe data and restore from iCloud, will she get her old SMSes and calendar entries back? Or did the merge decide that the phone, despite it being "old" was right and therefore the SMSes, calendar entries, etc. were discarded?

As a recovery option, I have a 4-day-old iTunes backup here from ~/Library/Application Support/MobileSync/Backup, but she and the phone are 3000 miles away, and it's 8GB, so I can't easily restore it for her. I do have the option of encrypting it and mailing it on a data stick if the iCloud backup is now toast.

Should she try the wipe and restore from the cloud (after backing up locally), or should I just get the more-recent backup in the mail? My goal is to get everything (especially the SMSes) back to the most recent version possible.

Solution

Answering my own question: iCloud holds three separate backups, so the initial backup I took (or one that the phone took automatically over the last few days) should contain all the data we want to recover.

I'm going to have her do the following:

1. Clear off old backups on her laptop except for the last one.
2. Wipe the phone.
3. Select "restore from iCloud backup" during setup.
4. Choose the oldest iCloud backup, which should be the one we want.