Thanks for filing the issue!

As the issue seems to a feature request hence marking it as Untriaged and requesting some one from dev team (UI>Settings) for further inputs in to it.

As you noted, this is intended behavior but I agree that it is confusing that there are many different ways to remove data. 
"Reset settings" only resets some configurations and doesn't delete data. To get rid of everything (data, settings, extensions, bookmarks, ...), you have to delete the profile. (Profile button on the top right, manage profiles, delete profile)

Settings reset is used to clean up a profile that was modified by malware or malicious extensions. It explains which data gets deleted and which data is kept:
"This will reset your startup page, new tab page, search engine, and pinned tabs. It will also disable all extensions and clear temporary data like cookies. Your bookmarks, history and saved passwords will not be cleared."

To delete all data, a profile can be deleted or chrome://settings/clearBrowserData can be used. If you sign out of Chrome, we also offer an option to delete all data. I close this bug as working as intended but are thinking about improvements to consolidate the various deletion mechanisms in Chrome.