There should be a warning in KUser or it should be removed/hidden until it's fixed. I just ran into that problem.
Auto-login saved me from losing access to my account, but i can't perform any administrative tasks now. Any way to recover the root account or reset the password?
I'm thinking if you open KUser, add users, then set the passwords for the old users it would prevent losing the passwords. Can somebody confirm that? (or what exactly happens with the passwords?)