Nothing gets lost, it simply updates the files already installed on your computer while leaving the player file(s) alone.
It would've been nice if they told us what was fixed in this update. My idiots STILL WON'T STAY ASLEEP!!!!!
The fix is because some of the 2nd generation people were "zombie idiots" is I believe how Arthur phrased it. When the 2nd generation took over the house, some of the people had no random actions and just stood there unless told specifically to do something.