If you update a module you have built you will be presented with the attached message.
-> If you have made modifications in widget templates they will be lost.
As far as I know if you check the box all widget templates will be changed -> also the once you created from scratch. If I am correct on this I would either
a) change the message to. Alle widget templates for this type will be reset (changed and new/own templates)
b) only the default created templates would be reset.
As the message reads now you could be lead to the conclusion that only the changed widgets would get reset not the once you created from scratch.