When you click on sync Products it creates the product present in POS to WooCommerce. And with this, a link is established between the WooCommerce Products & POS Products.
Technically woocommerce products ID is stored in POS database to create a mapping between them.
After you have Synced the products if you click on “Reset Synced Products” then the link will be broken (technically the woocommerce product id stored in POS is deleted and set to null)
This reset is useful when you’re changing the WooCommerce Website.
After Reset if you click on Sync Products again then it will check for same products SKU present in WooCommerce, if not present then it will create the product and store the product id in POS.
Note: deleting of products in WooCommerce is not required if the SKU for products in WooCommerce & POS is the same.
Same applies to Categories also.