iCloud Drive is Apple's newest could storage service. It officially launched with iOS 8, though it's not available to Mac users until the release of OS X Yosemite in October. It is designed to store documents and makes them available on all of your devices.
Users began reporting problems with the Reset All Settings features in the MacRumors forums last week. Those users have said that Apple is investigating the problem, but there's been nothing official as of yet.
Accordingly, we recommend that you stay away from this setting, and that you have your documents backed up.