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You're doing it wrong. Monster Power cannot be changed from within a game. It can only be changed at the character select screen. Instead of clicking "Resume Game", you need to click "Change Quest". Monster Power is at the bottom, in the "Select Difficulty" section, next to the normal/nightmare/hell/inferno dropdown.
Sometimes, and usually after patches, user options seem to get reset to default. I haven't been able to pin down whether this is due to some issue in the patch process or users simply accidentally or intentionally erasing their settings config files, but if you ever notice that your layout isn't quite like you remember it, double check your settings first.
Well I can assure you it has nothing to do with users deleting the settings config files.
The Monster Power setting specifically, is bugged on its own, and that has to do with the content of the patch, and not the action of patching. During all of 1.05, Monster Power would randomly uncheck itself. On 1.06 we got blessed with it being fixed, and stay checked continuously like any well behaved setting should. Then, on 1.07, the bug was reintroduced, and Monster Power unchecks itself frequently once again.
It does so by itself, while the other settings all remain the same.
On a related note, regarding what you mentioned as all options getting reset due to a patch, it is because you guys modify the structure of the D3Prefs file...
For example from version
the previously unexistant line
was introduced. On previous patches some lines were even removed. And then the game discards your outdated "PreferencesVersion", probably thinking it is invalid, and replaces it with a default new version instead.
I had to end up creating a copy of my D3Prefs.txt, so that whenever the patch erases mine, I can just manually copy back my values.
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