Why do dreamweaver updates always delete my site definitions and local sites?

It's possible that Dreamweaver's updates might be overwriting or relocating configuration files during the process, leading to the loss of your site information. To minimize the hassle, consider backing up your site configurations and files before updating. Additionally, reaching out to support or community forums could provide insight into any specific issues with the update process and potential workarounds. It's essential for updates to be seamless, and your feedback could contribute to improving the user experience for others as well.

Local site folders & files are still where you originally saved them. But you may not see them listed in your Files Panel if Preferences were purged.  Go to Site > New Site > Browse to your local site folder. Example C:\MySite\

Losing your Preferences is one thing, but your actual files getting deleted during an update is definitely not the intended behavior, no matter what setting you're using. I've never had it happen while working with DW (starting with CS4 when GoLive was killed). 

The only plausible reason I could see a DW update deleting your actual site content and requiring you to download your files from the server, is if maybe the sites are being stored within the program folders that get modified during an update. 

I'm sort of grasping at straws here though, a DW update should not be deleting your local files, no matter what.

Where are your local files being stored?

Are you deleting Preferences when you update?  If yes, that would explain why your settings are not being saved.

Refer to Creative Cloud Desktop App, Advanced Options.

https://helpx.adobe.com/creative-cloud/help/creative-cloud-updates.html

Hope that helps.