I tested checking that box, and if I am not syncing my entire library but only certain playlists, the preview shows that it would delete all the files that aren't in the particular playlists I'm syncing (both the MP3s and all my other playlists files). If I AM syncing my whole library but most songs are already on the device, it doesn't make sense that it has to delete them all and then re-add them to the phone, and it's a waste of time. I mean I guess if deleting and then re-adding my entire library even for small changes is the only way to get it to work correctly, I will do that. But it takes a lot more time and I shouldn't have to.
If you have changed your storage settings in between syncs so that the files are due go to a different folder, or are saving files to playlist folders with one playlist the first time and a different playlist the second time, then they will be recopied and the originals will be left unless you tick that option.
If the file currently exists on the device in the location where MB is sending it and is not older than the one currently on your computer (by date modified), then it will not be deleted and will not be resynched. It will be left alone.
It's probably worthwhile to post a screenshot of the full device settings page so we can see what you're doing wrong.
Reply to your first sentence: I haven't changed any storage settings in between syncs, and my sync setting is for the songs to be arranged in the same folder structure as they are on my PC, not into any playlist folders.
Reply to the second sentence: Yes MB is leaving the current file alone, but it is duplicating that file in another location on my phone even though I haven't changed settings in between syncs.
Reply to the third: I will do that later today.