It shouldn't :) Back with Firefox 1.x I think, we were using ZIP files and always supported unzip over the old one. But we ran into a situation where if a file was there from the previous version, it would remain since the new version no longer had that file. Oddly, the new version would try to use the old file and crash. That was back when I was only doing Firefox and Thunderbird, I think. As we added in apps like OpenOffice and GIMP it became much more of an issue.
So, we have the PA.c Installer able to take directives like whether or not to preserve everything in App, whether to preserve or remove specific files, whether to preserver or remove specific directories, etc. In addition to overwriting the existing files with the new ones, of course. This made life a lot easier on everyone. And users didn't need to worry about manually deleting specific directories but keeping others when updating. You just point the new version to the same X:\PortableApps\AppNamePortable directory and it intelligently upgrades. It even supports custom code for things that fall outside those simple keep/preserve so we can specifically remove certain settings on an upgrade where a given app breaks its own settings and doesn't support the old ones, etc.
For example, I just wrote the package for FreeCommander XE Portable for the publisher to release. The new one doesn't support the old settings and will break if they remain, so I have the installer back them up within Data (just in case the user wants to revert manually later). I then had it read the preferred language from the old settings and write them into the new ones for the user for convenience. I could get more explicit and read/write other settings as well if I had the time.