The settings for How questions behave determines how the quiz will present the questions to the student.
The Adaptive mode setting allows multiple attempts for each question. This is different from Attempts allowed, which allows multiple attempts at the whole quiz.
In an adaptive quiz, when a student answers a question incorrectly, the quiz displays that question again and gives the student another chance to answer it correctly. How many attempts the student gets is determined by how much you penalize the student for each wrong attempt.
For example, assume that you penalize the student 50 percent for a wrong answer. If the student gets a question wrong, then they can try once more for half points. If the student gets the second attempt correct, they get half credit. If they get it wrong, the system subtracts another 50 percent from the score. Now, the question is worth zero points. The system will not display the question again for a third attempt, because it's now worth zero points.
Adaptive mode (no penalties)
The Adaptive mode (no penalties) setting also gives the student multiple attempts at answering a question. However, the student gets an unlimited number of tries, because there are no penalties for wrong answers.
Interactive with multiple tries
When you make a quiz interactive with multiple tries, you allow the student to try each question multiple times. After each wrong attempt, Moodle will display a message. You create these messages for each question.
This differs from Adaptive mode, where the student gets multiple attempts but no feedback.
When you select Immediate feedback, the student submits each question as they answer it. The quiz immediately displays a message based on the student's answer. You can create separate feedback messages for each answer, for any wrong answer, for any right answer, and for the question, regardless of the answer.
If a quiz uses Deferred feedback, the student submits the entire quiz after answering all the questions. Then, the quiz displays the student's score and any feedback that you have created for the questions.
Each attempt builds on the last
This option only has an effect if multiple attempts are allowed. When this setting is enabled, each attempt that a student makes will display the results of the student's previous attempt. The student can see how they answered and scored on the previous attempt.
The setting for Each attempt builds on the last is especially useful when you are using a quiz as a teaching tool, instead of an evaluation tool.