Device updates that break root are fairly common - in fact, I'd go so far as to say that the majority of updates do so. What's a bit less common, though, is an update that resets your device because you're rooted. The device in question here is the NOOKcolor, and unfortunately it looks like that's exactly what's happening.

Before I dive into the details, I think it's important to note that I doubt that even as much as manufacturers and carriers dislike when people root their device, it's pretty far over the line for them to remotely wipe the devices of people who have done so.