Well since you seem to be in more of a testing-capable environment, what I was suggesting was that you try and recreate what I went through and witnessed happen firsthand so it could be rectified before it has the chance to affect anyone else.
Doing this wouldn't be too hard. I imagine you keep copies of previous versions of the software. Using version 5.1.1 or older, paint a test canvas quickly in the free, unlicensed software. Since you can't save, leave the canvas open, and enable wifi to license the software. With the ability to save activated, check that it's saved locally to the iPad.
Next, open up a new canvas, paint a test pattern on it, and save it also but leave it open. Verify it saved locally. You should now have two saved works.
Being on v5.1.1 or older and with the software licensed you're probably still connected to the wifi. Following the steps from the videos I posted previously you're going to activate the licensing glitch in the software (shut down the software completely, disable the wifi, shut down the system, wait 20 - 30 seconds, turn the system on, load the software without wifi enabled).
If done properly, the software will now display the message about needing to license. The image you originally painted before licensing should be on the live canvas now, not the second image you had open. That second painting will be gone along with its local save.
Next close the software entirely, leaving it in the unlicensed state, then start it up again. The painting you initially did as a test should still be on the canvas, and there should also still be a local save for it. Now create a new painting. That initial painting you had live will not only disappear, but it will also delete the locally saved file on the drive. Neither of the test canvas paintings will go to the recently deleted items, they vanish entirely.
With the software being on 5.1.2 this isn't so much an issue, but without you testing the above scenario, if the software becomes unlicensed for your users in the future for some unforeseen reason, they could easily lose saved data. It happened to me, and as I said, I don't want to see someone else lose something valuable to them over what could be a quick fix of a simply unknown bug in your program.
I appreciate all of your help in fixing the licensing issue so quickly. Thanks again!