"Discard" is not a git operation.

If you have set up your staging area for a commit you may want to discard (unstage) changes from the staging area, as opposed to discarding changes in the working directory.

Of course, the difference between the two is obvious if you're using git CLI, but I can easily see someone using a GUI (and that maybe isn't too familiar with git) misunderstanding "discard" as "unstage".

Either way, what happened here indicates that all the files were somehow added to the VC, without having been committed first, or something like that, because git will not let you discard a file that is untracked, because that wouldn't make any sense. The fact that the GUI let this person delete a bunch of files without first committing them to the index is what makes this a terrible design choice, and also what makes the use of the word "discard" misleading.

Ok fair enough, but I'm under the impression these files existed before the source control was implemented.

I guess it's all up to how the program handles existing files.

I remember following the drama back in the day. That warning you saw was the result of this now-classic bug report.

Did you even read the thread?