On this phone. Every set is saved the moment you log it, with no connection needed. This is the copy the app reads from.
And in the cloud. Seconds later it is copied to a server under your sync code. That copy survives losing or wiping the phone.
Your code is the only way back. There is no email and no password reset. Keep it somewhere that is not this phone.
A backup file is a snapshot — it holds what you had the moment you saved it, and never updates itself. Sync is what keeps up. A file is worth having anyway if you want a copy nobody else holds.
It updates itself when a new version is out, except during a workout. This forces it.
Clearing wipes this phone and, a moment later, the cloud copy too. A backup file is the only way back from it.