A sync'd joplin instance stores its notes in two places:
- The local client - this is all stored in the
- All your actual notes, tags, metadata, note revisions etc. etc. are stored within that sqlite databse.
- The rest of the dir contains your note resources, some settings, log files and plugins.
- The sync target - this is stored wherever your sync target is set to (in your case a local folder).
- This contains your sync "database" of .md files containing note data, meta data, deltas etc. used to make sure the various clients are in sync with eachother (importantly it doesn't simply "read" from the sync target - each client uses the sync data to make changes in its own local database (the sqlite database mentioned before)).
In your case it seems like your sync data was deleted (how? I have no idea unless you did anything on the OS like move it or alter any items within it) and those changes (i.e. deleting all your notes) have been propogated to your desktop client which it then warned you about before you disabled the fail safe and allowed it to delete all your local data.
So without seeing the database in question I can only assume that all your actual note data has been lost in both the sync target and your local database.
Either way you should take a copy of your profile directory now just in case there is anything within it you can salvage by following the guide I posted before (unless you already have in which case you might be out of luck).
Seeing as you set up a sync target, surely that means you have another client connected that might have still have data? You should save that profile too and see if that has anything within it too (hoping you didn't also disable the fail safe there too).
This really does show how important a backup is, I can't shill the "simple backup" plugin enough.