Given the Switch's propensity to utilizing the microSD over the eMMC for storage purposes, it's common to find that the on-board storage is largely unused.
Having the option to perform backups on a file level would significantly cut down the time required to perform a backup over block-level backups (Especially so for SAFE and USER).
This was feature that a lot of thought went into it.
It requires the utilization of BIS keys and needs a greater code complexity.
Also a restore will utilize the formatting and directory traversing of FatFs, which will increase the binary size to great lengths.
This cannot fit, in hekate.
But a smart backup/restore option is nice to have.
So maybe this can be added as a payload module (now that payload launching was materialized internally).
So, I'll keep it open.
I've been wondering about this for awhile and would like to say I think this would be greatly appreciated by anyone who keeps multiple backups, either for redundancy or being able to restore a rawnand.bin from previous firmware versions.
As it stands, the very first backup made on a fresh Nintendo Switch is indeed 29GB, but you can use an archive manager to ZIP the rawnand.bin with Normal compression and it will reduce the size of this backup to give or take 756MB.
When the sectors of the NAND have been used at any point in time, say, by installing a game, this makes compressing the rawnand.bin image impossible, at least up to the point of what was already written to; even if you System Format.
29GB backups add up, so I'd love to see an option to be able to make these smaller.

Most helpful comment
This was feature that a lot of thought went into it.
It requires the utilization of BIS keys and needs a greater code complexity.
Also a restore will utilize the formatting and directory traversing of FatFs, which will increase the binary size to great lengths.
This cannot fit, in hekate.
But a smart backup/restore option is nice to have.
So maybe this can be added as a payload module (now that payload launching was materialized internally).
So, I'll keep it open.