V3 should behave as described, as long as it is online, deleting from the app resets it. However I’m assuming Wyze’s documentation assumes your camera has an issue so they tell you to use the button procedure since you either can’t do it in the app or it will fail to reset it if there is some issue.
If you use the button reset and don’t delete it from the app, when you re-add it, it just goes right back to where it was, re-downloads the same settings, etc (it sees the MAC address matches and just adds it back to the existing device). For some that is desirable, but if you want to do a total reset and reconfigure from scratch to ensure there are no “gremlins” sticking around, I’d do both. You can do the app delete after you button reset the camera too, doesn’t seem to matter.
The Outdoor is a specific model of Wyze cam, it uses an indoor base station from what I recall, things are set up a bit differently with that one.