What does the 'Import files from the local directory' button do?

I’m using the desktop version. I pressed the ‘Import files from the local directory’ button at the top of the screen (the two arrows that form a circle) to see what it does – I thought it may be a sync feature of sorts – and I lost much of my information. Many of my files were replaced with older versions of them.

What does that button do?

If the button has such an impactful effect, why have it on the interface with no explanation?