Switching to the beta version could potentially resolve the issue by avoiding the deprecated functionality, but you might also encounter new bugs or differences in features since it's still in the experimental phase.
Here's what you can try:
Check Version Consistency: Make sure that your environment adheres to the same version across all students to maintain consistency—at least until you sort out the data loss issue.
Switch to Beta: If possible, have your class try switching to the beta version of MakeCode Arcade temporarily and see if that prevents the data loss from happening.
Save Often: Encourage students to regularly save their projects often to minimize loss whenever logging out.