Hi Julie!
The action resolves at the completion time of the job it is attached to, deleting datasets of any other already-completed jobs in that workflow which are not marked as an output step (with a highlighted snowflake). This will *not* delete datasets of any job marked as an output.
Perhaps the confusion is that they're also marked as 'hidden' since they are not output steps?
The general use-case for this is to put it on one of the 'final' steps of a workflow (or multiple if you have a workflow with two long parallel tracks) to clean up and delete datasets from intermediate jobs (which have already completed) that you don't want to save as an output.
-Dannon