Clears the application state:
- clearState # clears the state of the current app
- clearState: # clears the state of an arbitrary app

What is being cleared?

The outcome of the command is identical to:
adb shell pm clear {package name}
That is removing all app-related data from the device (shared preferences, databases, accounts, etc.)
The command is removing the contents of the application's data folder. An equivalent idb command would be:
idb file rm --application {bundle id}/