What's worse, however, is that the update does more damage than can be recognized at first. The update also prevents a common workaround from functioning:
Gizmodo is reporting that both the original SIM cards as well as new SIM cards from AT&T won't work in iPhones that had been activated with the original SIM card, then unlocked from the network. That could present a huge problem for iPhone owners who thought they could get around the reactivation process by getting a new AT&T SIM card.
That's not to say that Apple didn't warn them. They did, and said in so many words that the pending update might easily break phones that have been modified. Clearly, with the plethora of reports about broken phones, it is no mystery that those who have a modded phone should hold back on updating.
It's far from surprising. In fact, the iPhone Dev Team has prompted people to not update until they've released their factory default restoration tool. Now the big question is, did Apple break these hacks on purpose or was it merely a side effect of the fixes as they claimed?