Thanks for confirming this!
Rebuilding a Droplet wipes the Droplet’s disk and replaces it with an image you select. This is an option if you’re concerned that your Droplet has been compromised, you’ve lost access to it, you’d like to switch operating system versions, or you’d like to completely replace the contents of a Droplet.
In some scenarios, it’s simpler to destroy the current Droplet and create a new one. We recommend rebuilding in two scenarios:
You want to keep your IP address. When you destroy a Droplet, its IP address is released back into the datacenter’s pool of available IPs. These are assigned randomly, so it’s very unlikely you’ll get that IP address back. On the other hand when you rebuild a Droplet the IP address is retained.
You want to spend less. DigitalOcean charges by the hour and only charges for the first 672 hours (28 days) in each month. That means if your Droplet has existed all month, you get up to 3 days at the end of the month free. If you destroy your Droplet and create a new one, that timer restarts. If you rebuild it, that timer continues to count up toward the free time at the end of the month.
Rebuilding a Droplet, like destroying a Droplet, is an irreversible process. If you have no backups, snapshots, or local copies of the data on your Droplet and you rebuild it, that data is completely irretrievable by DigitalOcean.
You can find more information about the process here:
Hope that this helps!