NOTE: This issue has been addressed in Microsoft Dynamics NAV 2018 and Business Central.

The expected behavior of the Dynamics NAV OData Service UpdateReplace operation is that it overwrites all mapped fields in the target record, except for the key, with data provided from the source. If any mapped source fields are empty, target fields with data are overwritten with the default value for the field.
 
However, if any mapped source fields contain values that are identical to those in the corresponding target fields, the target fields are overwritten with blanks. (D14359)
 
Example:
 
Source Record
Name, City, State, Zip
Smith, Concord, NH, 03301
 
Existing Target Record
Name, City, State, Zip
Smith, Manchester, NH, 03101
 
The UpdateReplace Operation modifies the target record as follows:
 
Resulting Target Record
Name, City, State, Zip
    , Concord,   , 03301
 
The Name and State are replaced with blanks because they are mapped and the data in both the source and the target was the same.

Overview of issues with the Dynamics NAV UpdateReplace Operation. Does not apply to Dynamics NAV 2018 or Business Central.