Purge Workflow Data - "Update the Nintex Workflow database to use this capability"

For Nintex Workflows, historical information will be stored in two locations: 1) A Nintex Workflow History List and 2) A Nintex Workflow Content Database.  In order to clean up this historical data, you will need to purge the records from both the history list and the content database.  When doing this cleanup, it is important that you purge the history lists first, as the commands for purging the history list are reliant upon the information within the Nintex Content Databases.  

To purge the workflow history from the site, you can go to Site Settings > Manage Workflow History Lists.  From here you can click on the targeted list and select the 'Purge Items' option from the ribbon.

Once you have completed purging the History List, you can then perform the Purge Workflow Data indicated in your initial post.  If you are seeing an error for 'Update the Nintex Workflow database to use this capability', you will need to go to Nintex Central Administration > Nintex Workflow Management > Database Setup, and click on the link at the top of the page that says 'Update Now'.  **Note: you will need to perform the database update using an account that has read/write access to the Nintex Configuration Database. 

For more information on Nintex Workflow History and Nintex Workflow databases, the blogs below should provide some good information.

Demystifying Workflow History (Part 1)

Demystifying Workflow History (Part 2)

It shouldnt cause any downtime, but to be safe I would recommend running during a lower traffic period.  The database update will update the Nintex database schema and, depending on how many updates are due, could add additional tables and indexes to the Nintex Databases.