The other day, I experienced this tragic event.
My friend was an adult, and had already reached Bowerstone. I joined in on local co-op as a sub-character, and when I returned to my game I had been replaced with the sub-character.
Renown, abilities, money, and
/
& corrupt/pure stats were erased.
However, I then later plugged my harddrive back into my original 360 (I had taken it to a friend's house and put it in his console.) and some of my losses had been regained. By that I mean my character's appearance and their abilities. Though it had all been reset to what they were before I had joined in on co-op. Also the weapons and items I had acquired while playing co-op never disappeared.
Unfortunately, my renown and all 3 million dollars had been lost. In the logbook it states that I have around 50,000 Renown but everywhere else its stuck at the reset amount. And my status amongst other places have all been reverted to Unknown and Familiar.
Before this I had only experienced one glitch, (I fell through the floor in Reaver's home.) but afterwards such glitches as people showing up as colored silhouettes and falling through floors began to happen quite frequently.
I was distraught at first, but now I just feel frustrated. I had just completed the story and I still have my properties which give me around 14,000 every day. And Fable 2, being such a treasure of a game, still leaves me wanting to play. But just the fact that the hours of gameplay had been lost, along with the fact that glitches are popping up a little too often leaves me upset.
I do hope to hear of a solution to this problem soon. Personally, I think Lionhead did quite well making the game. Especially considering how often the pushed the release date back and their online Video Diaries were unsatisfactory. But the game is excellent. Mostly just the entire gameplay and freeedom, not so much the way-too short and simple storyline. But the whole substitue character when playing co-op seems like a not-too-fun idea.