[UncivilDKizzle]

I am also experiencing this issue. I have the title update, and I have pre-existing saves from the downloadable version. I copied the save onto a USB stick to experiment with.

My first attempt was to rewind to Chapter 4 of Episode 3. This reverted to episode 1.

I then deleted the save and copied the old one over again, and made copies into the 3 slots. The outcomes were:

1 - Rewind to Chapter 3, episode 3 - Reverted
2 - Start Episode 2 - Reverted
3 - Rewind to Chapter 6, Episode 4 - Reverted

So to summarize, any attempt to play the game with saves on a USB stick resulted in reverting to Episode 1. I then loaded my original saves from the hard drive (120GB) and made copies. Results:

1 - Original save, didn't try
2 - Rewind to Chapter 3, Episode 3 - Worked.
3 - Start Episode 2 - Worked.

So it seems to me your glitch is likely related to saves on USB sticks. In addition, I had no issues with performance glitches as other posters have mentioned.