[grahamearcher]

The prompt you are referring to should have been shown when the app first started up. If you tap the three dots at the top right corner of the library screen (called the overflow menu), then tap Settings->Storage, you should see the "Let MobileSheets Manage My Files" option, and it should be checked. That setting is what the prompt would have changed. I would recommend leaving that setting on unless you want to manage your own files and folders and understand the consequences of that. 

Mike