It's difficult to be 100% sure without more information from Toshiba, however I would read that as:
- Factory Default Reset - Return the PC to the state it was in when you bought it, i.e. with Windows on it, no personal files retained, and needing lots of updates.
- Erase Hard Disk - Completely wipe the hard drive ready for a manual installation of Windows or some other O.S. I would guess that this will also delete your Windows restore partition, but am not 100% sure.
HTH
Neil