Simulate app update

Solution 1:

Q1: No, it's not normal for an update from TestFlight to delete all data in an app. I regularly update apps via TestFlight, and have never experienced having data deleted.

Most likely you either (a) changed the bundle-ID in your app between the two versions, or (b) saved your data in a non-allowed, non-standard location.

Q2: You can simulate an app update by publishing multiple versions in TestFlight and changing between them.

Another method is to install the app on the device, and then open Settings => General => iPhone Storage. Select your app and press "Offload App". This will delete the app, but keep documents and data - exactly as happens during an update. Afterwards tap the app icon on the home screen again to re-install the app.