That’s basically the same for the users, though. I’m currently planning a new release for one of my own apps, and I’ve got a similar problem.
And still, I’d rather wait a few weeks with a release myself before I’d ever release a version that deletes a user’s settings, or, much worse, their actual data.
If I have time once I’m done with my releases, maybe I’ll be able to take a look at the issue you’re having in VLC, and maybe I can fix it.