Adding onto this – happened to me too! Level 25, pretty sad about that. I’m 100% sure I logged off in town while still hardcore, not my first login since the update (I logged on about 10 hours after the update news was posted, then just now) but now character is no longer. I wasn’t able to try to connect to my hc server, the character was non-hc on login.
Bug report files below:
Screenshot (just the login screen for the affected character)
help 
Edit: There’s a potential workaround for people who only used a local server by manually changing some files. I’m going to try this myself:
Edit2: Unfortunately it didn’t work, worth a shot though.