It's not file level, but backup date level. That's what it says, backups being a complete version of your data:
The oldest backups are deleted when your disk becomes full.
If you look into the computer-named subdirectory of the directory Backups.backupdb of your Time Machine volume, you'll see several folders named with a timestamp as name. These are your available backup versions. Each of these is the full content of your system volume (minus the excluded files) and can be selected independently for restoration e.g. during OS X setup.
To conserve disk space, Apple uses file and directory hard links, so if a file doesn't change between backups, the new file system entry points to the same data on the disk.
If Time Machine decides to delete older backups to free some disk spaces, it deletes one (or more) of these complete versions of your data. And here's the cool thing: If it deletes an old backup, but you didn't change a particular file in the mean time, it simply reduces the link counter by 1, and nothing actually is deleted (as there never was any data duplication on the backup volume). So if you still have the file (i.e. there are more recent backups that point to the same data), the file is retained, even though some hard links to it are removed.
This means, of course, that in your example, Time Machine will continue to delete old backups until some disk space is actually freed. If you still have the 280GB file, it just won't be deleted.
