No, you should not delete
everything on your SD. Just do what the guide tells you to do. There is a part that removes not needed files from the SD (
Section VII Cleanup SD Card).
Although your 3DS technically stays fully operational when wiping the SD
after completing the guide, this does not make sense.
Deleting the
SD:/3DS folder removes all your .3dsx homebrew apps.
Deleting the
SD:/Nintendo 3DS folder also removes your installed games (and saves) as well as installed homebrew CIAs like Anemone, FBI,…
This implies it is a good idea to backup the content of your SD from time to time (SDs may corrupt or fail without warning for no apparent reason). It is advisable to backup saves and extdata in decrypted form with
Checkpoint and/or
JKSM.