[dnanian]

We've got a "preserve" option planned out that might allow this to happen in the future... but for now, it's important to remember that Smart Update is, as is documented, just like Erase, then copy, just faster... so, anything that's on the destination that's not in the selected set of files on the source will be removed.

The best thing to do is not keep things on the destination volume that are not backup files. Instead, partition the drive, and keep your "real" files there. It's much safer, and easier to restore, too... even with simple tools that don't allow any selection at all.