I suspect you might be quoting this incorrectly (the wording is along the lines of "...100% of your data is about to be deleted".
The fail safe is there to protect your data in case something goes wrong - for example if your sync target for whatever reason were to be deleted entirely a Joplin client will think that you have deleted all your data and tries to match it; the fail safe is there literally to protect you against that situation. By disabling it you permitted Joplin to delete all your local data.
This post might also be helpful as an extension to the previous info. I really hope you had some backups.