Also, I would quibble with your description of it as 'resetting of visible app reviews' as the old reviews are still visible, they're just one tap away...
But in a low volume market like the Mac App Store it takes anywhere from a few weeks to months to get 5 reviews after an update. (Or even years in non US stores).
I made the experience that updating a well reviewed Mac app leads to a drop in sales until you get back to at least 5 ratings. (You need at least 5 ratings to display the average rating in search results and category lists in the Mac App Store).
This is a big incentive to keep updates back until it is really necessary to release them.
They need an option when releasing a build: reset reviews (major release) or leave reviews intact (minor release).
- show the version the user reviewing was on - allow the developer to reply to the review to say the bug was fixed in version x.x
Exactly this situation happens and it's fine because people mention it. "In the latest update, X happens"
Plus developers can respond to reviews and mention that the issue was fixed