The “Reset This PC” tab looks just fine, but you need to do more to delete everything completely. The reset function in Windows 10 or 11 may leave some data in your PC, which is undesirable, especially when you want to dispose of the machine or give it to someone else.
The latest announcement on Microsoft’s known issue page indicated that the resetting option might leave out synced OneDrive files.
The manufacturer elaborated the issue stating that it would be hard to delete apps and folders with reparse data or other files that have been synced or downloaded locally from OneDrive.
It means that any data you have on your PC, that you downloaded locally from OneDrive, may remain on your PC regardless of the reset option you choose.
Everything else, including files stored in the cloud, will delete as usual as long as they are “cloud-only” and have not been opened or downloaded on the device.
The best way to avoid leaving your files in your PC when you reset is to unlink or sign out OneDrive before resetting your PC.
Microsoft advises all Windows users to take precautions as they work on a resolution. Therefore, you could have this problem if you’re using a currently-supported Windows version.