Modern macOS versions inherently separate the core OS from system and user data by default.
No need to worry about this.
There is such an option in macOS to handle this without you needing to think about this.
If you simply reinstall macOS the data is left alone. Data in macOS Monterey is kept separate from the core OS. Start up the system in recovery mode and review the options. Look here at this official Apple doc on this subject. Specifically the “Reinstall macOS” section whose very first sentence is:
“Reinstalling macOS does not remove data from your Mac.”
And as far as what is wiped out and what is retained, my understanding is that 100% anything that is not a part of the core OS files is retained.
It is a crazy new, and very useful, way of macOS handling this but I believe it can even retain config files and such.
It is purely an OS wipe like the way an iPhone wipe while retaining data works. Read this official Apple doc titled, “About the read-only system volume in macOS Catalina.”
While it refers to macOS Catalina, that is simply the first macOS to use this new setup. Any version of macOS from macOS Catalina to now (September 2022) works like this.
Cache and settings cleaning.
If your desire is to retain data but also resetting some core macOS settings that can be user adjusted, just download and install Onyx and use it to deep clean and reset macOS caches and rebuild deeper system libraries.
Another idea is to create a new user on the system and wipe out the old user; all user settings should be 100% clean then.