Resubmit based on previous attempt doesn't change the previous attempt, it just gives students a copy as a starting point.
For file submissions we don't generally find this useful; the student will have their old file anyway, or even a feedback file with some teacher comments on it from which to compose their new attempt.
When using multiple submissions; you need to set up the assignment submission settings to determine how new attempts are created; manually by the teacher, or automatically until pass (in which case the passing grade needs to be set under Grade settings). There's a maximum attempts setting as well.
Previous attempts are visible on the grading screen by scrolling down to the bottom.
If you use multiple attempts, especially with automatic reopening, warn the teachers what to expect-- otherwise it looks like failing marks dissapear.