That’s the folder into which you have to restore the backup of your former Plex data folder.
Otherwise Plex won’t be able to find the restored data.
If you restore the plex data folder of the previous machine to a different folder (maybe because the system drive is rather small and you want to keep Plex data separate), then you’d have to tell Plex about its location: [HowTo] An extended guide on how to move the Plex data folder on Windows
A frequent mistake is also to make the backup copy of the Plex data folder while Plex server is still running. If you did that, the primary database file in the backup is corrupt. You will have to revert to one of the other safety copies: https://support.plex.tv/articles/202485658-restore-a-database-backed-up-via-scheduled-tasks/
