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Usually one part was written badly: a truncated sheet, a relationship pointing at nothing, cells out of order. The repair tool rebuilds the package the way Excel reads it and trims the broken fragments, keeping every row it can.
Depends on where it broke. Even without the ZIP directory the parts can be recovered one by one, and a truncated sheet keeps every complete row before the break.
Undamaged parts are copied byte for byte. Repaired parts are re-verified and Excel is told to recalculate on open.
Password-encrypted files and files that were overwritten. Convert old .xls files first.