Functional levels refer to the features available to an Active Directory domain and forest as specifically compared to versions of Active Directory available with previous versions of Windows Server. For example, a forest functioning at the Windows Server 2008 level has added functionality, including greater control over password policies and additional logon information,when compared to a forest operating at the Windows Server 2003 level.
A minimum forest functional level of Windows Server 2003 is required to add Windows Server 2012 as a domain controller. Otherwise, the Windows Server 2012 forest functional level remains the same from Windows Server 2008 R2. At the domain functional level in Windows Server 2012, the support for Dynamic Access Control and Kerberos armoring KDC administrative template policy has two settings: Always Provide Claims and Full Unarmored Authentication Requests.
You can roll back the forest functional level from Windows Server 2012 to Windows Server 2008 R2. At the domain level, you generally can’t roll back unless you’ve raised the domain functional level to Windows Server 2012 (or Windows Server 2008 R2) and still have the forest at the Windows Server 2008 level. In this case, you can roll the domain functional level back to Windows Server 2008 or Windows Server 2008 R2.
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NOTE: BACKUP AND RESTORE
As a last resort, you could use a backup and restore to get back to the previous functional level, although this isn’t an official rollback in the true sense of the term.
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