Penultimate's Automatic Dropbox Backup feature allows you to choose any folder in your Dropbox to use for the backup. The default folder ("Penultimate Backup") is usually a fine choice. However, if you change it to the root folder "/" of your Dropbox, older versions of Penultimate would attempt to replace the contents there with its backup. In that case, though, the contents are your entire Dropbox! (Note that you'll see a warning first suggesting you stop the backup.)
If this happens to you accidentally, you can recover all deleted files directly via the Dropbox website. We genuinely apologize for the inconvenience, and have improve the app in its current version to disallow this particular loophole.
1. Turn OFF automatic backup in Penultimate.
2. Log into dropbox.com, and click to the "Files" tab.
3. Click "Show Deleted Files", like this:
4. This will show you everything that was in the root folder but was deleted. Check the box next to all of the "grey" (deleted) items, like this:
5. Click the "More" menu, and select "Undelete 3 items" (or however many items you've selected in your case):
6. Dropbox will ask for your confirmation, and then restore all of the files.
7. Choose a different folder in Penultimate for backups. You can create a new folder anywhere in your Dropbox for it.