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"delete local data and re-download from synch target" button

I am synching my Joplin installations with DropBox.

Under Joplin>
Tools>
Options>
Synchronization>
Advanced settings>
there is a button "delete local data and re-download from synch target".

Does the button text "local data" mean the data in the database under ~/config/joplin-desktop/* ? It doesn't mean the data files from DropBox, correct? I don't want to delete any DropBox files.

Yes only the data under ~/config/joplin-desktop. Data on Dropbox won't be changed and it will downloaded again next time you sync.