The single-bay My Cloud and the My Cloud Mirror keep their operating system on small partitions at the start of the drive and the data on a large ext4 partition behind them, wrapped in a single-member or mirrored mdadm array. The EX2, EX4, PR2100, PR4100 and DL series do the same across two or four drives with a RAID set. The My Cloud Home is a different design, with its files stored under content IDs and their names in a database. In every case the red light comes from the operating system failing to bring the unit up, and in most cases the reason is on the system partitions, not the data.
The OS 5 migration is the commonest single cause. Western Digital ended support for OS 3 on 15 April 2022 and pushed OS 5 to the units that could take it; the update rewrites the system partitions and, interrupted or failed, leaves a unit that boots to a red light with its data volume untouched. A drive that has started to fail shows the same light, because the OS cannot read its own partitions cleanly, and a power cut in the middle of a write does likewise. On the multi-bay units a lost RAID member adds a degraded or missing volume to the picture.
The factory reset is the danger. Offered as the fix for a unit that will not boot, it re-creates the system partitions and, on some models, the data volume too. The bench does not need the operating system at all: the drive or drives are imaged, the ext4 data volume mounted from the image, and on a My Cloud Home the database recovered so that every file gets its name back.