I don’t remember getting this option previously when deleting a new user. If they have been caught by the system as potential bad users, how would they even have a record to scrub?
Here is the original feature request (as you noted):
Even a rejected application generates a some entries in the site database. This feature was designed to explicitly remove that material — which could be either sensitive (as in my use‑case) or objectionable.
Regarding documentation, that could be a useful exercise!