Removing sensitive data from files and Azure Repos history is crucial for maintaining security, as once secret information becomes public, it can fall into the wrong hands. To recover from a breach, invalidate tokens and passwords that were previously made public, and remove sensitive data from repositories to prevent further exposure. Additionally, consider the repository's full history of commits, which may still contain sensitive data, and take steps to mitigate this risk. Following security best practices is essential for protecting against potential threats and ensuring secure decision-making.