This sub-menu of the File menu, contains a list of recently used files (most recent first). At the bottom, under a rule line there is an option to clear the existing menu, after which the list will begin to re-populate again.
The list now holds up to 30 items. It does not lists new documents created by opening items in the 'Favorites' menu. But, if an item opened by the latter method is named and saved, i.e. as a new document, that item will be added to the list.
See also—notes linking to here: