Yes this works!

I used both the ‘Prune’ and ‘Regenerate’ features as part of a process I had to run to reduce the size of my uploads folder. By deleting thumbnails I was able to download just the original image files, batch resize/optimise them, put them back on the server and regenerate the thumbnails. Worked exactly as expected. Most of the free (and premium?) image optimising plugins actually fill up your server with more files so this was exactly what I needed. Thanks!