It's both. Sentinel files contain the costumes (mostly; it needs some massaging to get to back to an editable costume), builds as in powers and enhancements, XP totals and level, influence, inventory of savlage/recipes/enhancements, and badges.
It's not a complete record of the character as there is some serverside state that the client doesn't have access to, like story arc completion and reward tokens, but it's a close enough approximation for a small or medium sized server of trusted friends.
Well not to flog the dead horse or anything, but your description still makes me think that sentinel files may be able to semi restore characters if at all possible. If I'd have to go out and regain the badges all over again, that's fine.
1. I won't make certain mistakes like I did originally
2. As a restored 50, many of the badges would be a snap to get.
3. I wouldn't mind rerunning the incarnate arcs to regain the badges and reopen my incarnate powers.
4. If the costume can't be restored, toss some tailor tokens and go to the tailor shop.
Now granted there is something in the files that can indicate the file was edited/altered but of course that won't stop some people and thus yes it is possible for "bootleg Sentinel files" to emerge. There will be always people that want to cheat the system. However those that receive submitted Sentinel files would have to check and compare them to previously submitted files for example
John Smith submits a file for a blaster that was 50, 2 billion inf, fully purple slotted, 9999 of each salvage item in the game, 9999 reward merits, 9999 rikit merits, etc and the blaster is named The Duke of Nuke. First off I suspect the restoration team would raise an eyebrow at such a character whether they restore it or not.
Then sometime after someone named Jake Riley submits a Sentinel file for a blaster named Nuke of Duke and aside from the name, the rest is the same..... somehow I don't think Jake would get his character back as such a file would like be "bootleg".
As to those that didn't hear of Sentinel or didn't use it....well that it is too bad, however that shouldn't be a reason to stop those that did use Sentinel to use the files to at least somewhat restore their toons.
But anyway, we shall have to wait and see.