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This is on Unity 3.4

If you create a button, for example, and place it into your UI as a prefab, then decide you need to do it differently and recreate the button in QudUI and bake it using the same name, it does not update the prefab… it breaks it.

You end up with the old button still in the UI but "broken" and a new button in the UI and unrelated to the old button. This means you have to go in and manually copy the location(s) of the old button to the new one, delete the old button and so on.

It's kind of a pain. It would be "nice" if when you replace an existing prefab with a new one, it would do so in a more graceful way. It is rare to "get it right" the first time and having the tool modify the prefab without breaking the Hierarchy would save a lot of manual labor.