Can someone give me more detail on the queue retry setting?

This is what I see in the documentation:

“Items that fail with an Application Exception are retried if you have configured the Auto Retry options in the queue, in Orchestrator.”

That doesn’t really explain how it works. Does it get set back to New? If so, when? If we are using a Queue Trigger, an item fails, and the queue is set to retry will the Queue Trigger find it again?

Why is it only “Application Exceptions?” Does this mean if I Throw a System Exception the item won’t be retried?