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This is actually the default result you get if you leave the defaults alone in some CI systems! My current company runs CI this way, in fact. A checkout is re-used between builds, and Gradle computes the minimal set of tasks that need to be run based on changed files just as it would locally. TeamCity will set things up this way by default. If you want a clean build on every run, you have to opt-in by checking a box.

How well does it work? Well .... it sorta mostly works. Sometimes a build will fail for inexplicable reasons because Gradle/Kotlin incremental builds don't seem fully reliable. You re-run with a clean checkout and the issue goes away.

How much time does it save? Also hard to say. Most of the time goes into integration tests that by their nature are invalidated by more or less any change in the codebase. That's not exactly incorrect. Some changes in some modules do avoid hitting the integration tests, though.

TC can also do test sharding in the newest versions when you use JUnit. We don't use this yet though.