Different websites in subfolders

On my domain name, I installed one WordPress website directly on the domainname (root) and 3 more in different subfolders (for demo and testing purposes).

On this domain is only 1 active database running.

Now I have a copy of subfolder 3, and want to install this to a (new) subfolder 4.

When running the installation process of the duplicator plugin, the first question is (step 2) gives default:

Connect and remove all data

Does this mean that all data from root-website and the 3 subfolders is deleted?

So, do I choose ‘create new database’ instead?

If this is the case, do I need to make a new database first on my hosting panel??

Thanks