You are confusing Reset and Refresh, the latter of which is contained in the Settings, Update & Security, Recovery Pane, Learn how to start fresh with a clean installation of Windows link, which then triggers Windows Security to complete the Refresh.
Based on Microsoft's own description the Fresh Start/Refresh option should do a completely clean reinstallation of Windows, keeping only your user data files and a few, select, Windows settings but wiping everything else.
I've never tried this to accomplish a completely (or very, very nearly completely) clean reinstall. I wouldn't hesitate to try it, though, if you're curious. You could report back then if it did work.