What does "Reinstall macOS" do, exactly?
It does exactly what it says it does–reinstalls macOS itself. It only touches operating system files that are there in a default configuration, so any preference files, documents and applications that are either changed or not there in the default installer are simply left alone. No doubt it is a bit more complicated than that but all a re-install does is replace the old files with "fresh" versions. 

No doubt there are preference files and other things that are deleted/modified but Apple seems to have gone to great lengths to ensure that reinstalling the operating system won't delete anything that you have subsequently installed/modified.