Correct. I select setup as new. It will sync all the contacts, iCloud photos, etc.
I do have to reinstall apps, which is so easy it’s not a big deal. Most just login and are happy again.
The only downside is some apps that keep their own data stores. Mine craft is an example. Download the app again an you loose all your personal data.
This clears out old unused apps. And gets rid of other hidden baggage.