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“Was that bug specifically related to Game Center?”
Not sure – I lost track of what was going on with it a long time ago. Although I haven’t personally experienced the “Update Progress” bug in quite a while, you still see the random report of it popping up on occasion.
But in theory, when cloud saves were first introduced over a year ago, the intention was for it to be enabled through Facebook or through Game Center for those who didn’t use Facebook.
“And did it actually damage things, or just not work as intended?”
The bug was that the game would wipe out all of your progress to the last cloud save, which sometimes could be as much as a day or more of gameplay. So instead of the cloud save being the backup of last resort in case of a crash, instead it overwrote your current progress.