Why am I not surprised.
So, I start up TWD, see an update. Oh goodie. After it gets done downloading, I decide to start up my third, extra file that i used to back up my saves while this huge mess was going on, just to see if it really works. Good thing I used that one and not my main two saves. It was in the middle of episode 4; when I started it up, it reset the file back on episode 1.
Good job, Telltale! I will not be purchasing Episode 5. Shame really.
EDIT: Not sure if this matters, but I don't see any title update in my Xbox 360 hard drive storage. All there is are the four episodes and the 11 MB "saved game" data.