Simple dumb beginner question

Guide PDF says when i start asset manager for the first time Ill need to extract game files. Then warns that it will overwrite anything in the working folder so i should NOT do this if i am working on stuff in there - despite this supposedly being something you only do the first time you run the asset manager. Should I be setting the working folder to something other than the default game install directory before extracting? Would i ever need to extract game files a second time in any case other than accidental deletion? What is love?

Many thanks for highlighting that! Is the PDF is basically useless then?

I actually haven’t read this PDF as I only make some simple mods.