Why count sitemap URLs
The number of URLs in your sitemap should roughly match the number of pages you want indexed. Far more usually means junk pages (filters, tags, paginated lists) are listed; far fewer means pages are missing.
Compare the count with the Pages report in Google Search Console to see how much of your sitemap is actually indexed.
Questions
Does it follow sitemap indexes?
Yes, up to 20 child sitemaps.
Are gzip sitemaps supported?
Only when the server sends them already decompressed. A .xml.gz file that arrives compressed cannot be read.
What is the limit for one sitemap?
50,000 URLs and 50 MB uncompressed. Larger sites split into several files listed in a sitemap index.
Is my data stored?
No. Sitemaps are read or built for the result you see and not kept.