Separate version history for file types with co-authoring and efficient shredded storage
In each library, there should be two kinds of versioning settings, each with its own settings for major and minor versions.
One kind of versioning settings for DOCX, XLSX and PPTX (i.e. file types with co-authoring and efficient shredded storage). In those versioning settings, the number of major versions can be higher (since less storage is used for each version).
Another kind of versioning settings for other file types (i.e. file types with less efficient shredded storage and no co-authoring). In those versioning settings, the number of major versions can be lower (since fewer version are probably needed and more storage is used for each version).
Co-authored Excel files often need 500 versions or more (for a few weeks protection).
A TIFF file in the same library certainly doesn't need 500 versions.
Don't tell us to store those files in separate libraries. It's not always convenient.
In SharePoint Online (and consequently in Teams), a lot of space is wasted on long version histories for files that can't be co-authored and don't need as many versions as files that can be co-authored (DOCX, XLSX and PPTX). To make matters worse, the file types that don't have co-authoring are the same file types that have less efficient shredded storage.
Two kinds of versioning settings in each library, please! One kind for DOCX, XLSX and PPTX (file types with co-authoring and efficient shredded storage). Another kind for the rest.