Patch 1.10 enabled a feature we call the “Magic Moment”. Essentially, it’s designed to automatically detect and queue the DLC you’re entitled to, so you don’t have to do it manually. However, for a very small number of users (less than 10 total individuals so far), it can overwrite your save data.

To ensure this doesn’t continue to happen, we’ve temporarily disabled the feature. If you have a copy of your old save on hand, you can recover it now and it should no longer be overwritten.

You can still download Cross-Compatible DLC too, you just have to do it yourself – the game won’t detect it automatically until we issue a fix in our next patch.

Again, we apologize for the problems you’re running into. Thank you for reporting the bug – it helped nail down how and why it was happening. :)

+ Michael Buffaloe on February 19th, 2013 at 11:33 am said:
Patch 1.10 actually contains a huge number of fixes.

WHAT FIXES WERE THEY?

STILL CAN’T RACE WITH FRIENDS WITHOUT SOMEONE GETTING KICKED. (HARD KICKS TOO)
STILL CAN’T JOIN PODS SOMETIMES.
CRASHING ~ CRASHING ~ CRASHING — EVERY DAY

THAT IS YOUR HUGE NUMBER OF FIXES??

Michael, what are you guys doing there at UFG?
The game still does not function properly! WHY???

Please stop making costumes and MAKE A FIX, please!!!
Thank you :)

We tried to restore the data from our PlayStation Plus automatic online backup, but it did it again.

Others have commented on this as well on the GameFAQ forum too.
http://www.gamefaqs.com/boards/664645-littlebigplanet-karting/65501258

FYI we have LittleBigPlanet 2 Digital Edition from the PlayStation Plus Instant Game Collection.

Oh… wait. It doesn’t have folders, and I did have to shift through countless Karting DLC to see what was new on the store.

Yay~

It’s going to take awhile to download all that DLC one of these days. );