I was recently having some problems with iTunes, and decided to reinstall macOS Sierra. I held Command+R on startup and clicked on "Reinstall macOS" without erasing the hard drive in Disk Utility. Once the reinstall was complete, I started back up and all of my files and programs were still there, along with my settings, desktop wallpaper, and everything else. (The iTunes problems were fixed.)
What exactly does this "Reinstall" feature do, if it doesn't remove programs and change settings to default?