This is a tough one. Not only do I have no idea why they're being trumped, but I also have a daughter that will be born pretty soon :D, and a project at work that is about to get hectic :( I'll try to fix it when I can but if you have the skills to help debug the help would be greatly appreciated.
Yes. And unlike virtually every other "disable wpautop" plugin this one will actually disable the client-side version of wpautop that runs when you switch between the Visual and HTML tabs. Even when using the P Tag mode or hybrid mode, wpautop is disabled and custom code is being used to inject paragraphs a little more intelligently.
Firstly, only use this feature if you are starting new with version 1.2. And definitely backup your database before running these tools, they have only been tested on two sites so far. And although in theory it is safe, you should still protect yourself.
The fix actually just runs wpautop one final time on the posts in the database. By default WordPress runs that function every time it displays content, so the raw data in the database is free of any paragraph tags & other formatting tweaks. The Fix buttons update the raw content in the database with the formatted version wpautop produces. And fortunately wpautop was designed in a way that it can be run multiple times so it shouldn't mangle your content.
All of your post content will be converted, including past revisions. So if you need to revert a page or post after you activate this feature, you won't have to reformat the previous version by hand.
The plugin also keeps track of when it was activated, so it will only modify content that was edited before the plugin was activated. So if you created some new content after activating the plugin and later realized all of your other content wasn't displaying correctly it's safe to use the Fix buttons without ruining your new content.