Setting LocalUserConfig to 1 means Dolphin would use the /User/ directory in the folder of the executable, as if you had placed an portable.txt next to the .exe file (but doesn't create that file).
Dolphin shouldn't "wipe" data because you are just changing the directory Dolphin is looking in and it intentionally doesn't wipe old data (where should it look? + worrying about possible data loss) or transfer it (you may want to quickly create new empty profiles).
Just to be sure, you deleted the registry keys "UserConfigPath" and "LocalUserConfig", correct? (Deleting the "Dolphin Emulator" folder inside the registry also counts). If so, and check if you haven't made an portable.txt file by accident.
You can also check the (Gamecube) Memory files (Tools → Memory Card Manager) to see what data is on them. It should fill out Slot A with the path Dolphin currently uses, and you can load a new memory card file (and also check the subfolders for .gci files, which is just an extracted GC memory card) to see what is in your backup folder.
Dolphin shouldn't "wipe" data because you are just changing the directory Dolphin is looking in and it intentionally doesn't wipe old data (where should it look? + worrying about possible data loss) or transfer it (you may want to quickly create new empty profiles).
Just to be sure, you deleted the registry keys "UserConfigPath" and "LocalUserConfig", correct? (Deleting the "Dolphin Emulator" folder inside the registry also counts). If so, and check if you haven't made an portable.txt file by accident.
You can also check the (Gamecube) Memory files (Tools → Memory Card Manager) to see what data is on them. It should fill out Slot A with the path Dolphin currently uses, and you can load a new memory card file (and also check the subfolders for .gci files, which is just an extracted GC memory card) to see what is in your backup folder.