Incremental builds only rebuild assemblies that don't depend on changed files. But it does copy all of the project output (subsequent projects that depend on it may depend on these assemblies and files being there).
This causes incremental builds to be much faster, but it doesn't "only deliver the changed files". It always delivers all files whether they are changed or unchanged. On top of this, you could have multiple agents and each agent can have multiple working folders, the incremental build could use any of these as base for the incremental builds, there is no guarantee that the changed files are between your previous build and the current one.
You'll have to implement this feature yourself, it has never been part of MsBuild or TFS Build. It would involve querying TFS for the last drop folder and performing a compare after running an incremental build. Then copying just the changed files and a log of deleted files.
PS: The TFSBuild.proj type builds are very deprecated. They have been surpassed by the XAML builds in TFS 2010 and have been considered "legacy" since then. They have subsequently been surpassed by the new VSTS/Azure DevOps build system which has deprecated the XAML builds. Most of the properties that interact with Source Control are ignored when a TFSBuild.proj project is executed in the Legacy XAML workflow. Instead, the XAML agent takes care of fetching the sources prior to passing control to MsBuild. These new VSTS/Azure Devops build tasks are now also getting YAML support for Git based source control repositories.
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