Three Rings, I am disappointed in you. I don't know anything about hosting a company and a MMO, but I think you could care about the community a little more than this.
Have you ever played your game without the Gamemaster Crowbar ready at hand to kill everything in 1 hit? People NEED these things that you are taking away, and they don't have 1-hit kill weapons that all of you do. This update, apart from Battle Sprites, is horrid.

First of all, the removal of the HP sharing revives. This is horrible. Why would you remove this when nobody has been complaining about it except for noobs? And even then, the noobs have not been dying THAT much. I assume that the only people complaining about this are the ones who like to solo a lot.
But one of the reasons that its called a Massively MULTIPLAYER Online game is that you play MULTIPLAYER. And the updates before this horrible one were representing that. Players being able to revive other players. Hearts that can be picked up by anyone. These were good things. But now, the only thing you can use are the Sparks of Life! No more sharing heat! No more getting last 1-hp chances at killing enemies that MIGHT drop hearts! No more being able to CONTROL when you revive! If you die, use that Spark of Life! And if you run out of them, too bad! Give us 50 CE!

Second, the revamp of transmuting/alchemy. I have not looked much into this topic, but I can only assume that it is either going to complicate or simplify the existing system. If you are looking to simplify it, why? It was already simplified enough! Just put some shiny materials into some unexplained machine, and boom! Divine Avenger! If you are looking to complicate it, which I doubt you are but is probably going to happen anyways, why? So the noobs cant craft a brandish to help them through the Gloaming Wildwoods without having to pay 50 CE for an Orb of Alchemy? And why do you need to use ANOTHER thing that costs CE in crafting? It was bad enough that you have to use CE by itself, which wasn't that big of a problem, but now we have to use that Orb of Alchemy! Get them while the economy lets you, folks!

Third, the Battle Sprites. This, and the difficulty sliders, are the only changes that I actually find myself liking. The backstory of all 3 are kind of cool, a machine that was able to adapt itself to the hostile environment of Cradle. But it seems kind of rushed, while everything else in Spiral Knights gets a ton of backstory and such, like the Shadow Lairs, or the missions leading up to FSC. The abilities that they have is cool, although I find the Maskeraith being kind of useless. The Caustic Quills' effect can be matched by the quite wide array of poison weapons, vials, and the abilities of other sprites. I like the design of the Seraphinx, and I am glad that they just didnt take the Mewkat model and put a harness on it. The Drakon seems like the one that everyone will pick, and with good reason. Its quite powerful.

Fourth, equipment limits. Why, did some alt insult your mother, so you have to hinder everyone in the game? I find this pointless, because if people have the high level equipment, then its likely that they are going to do the missions. If its a matter of balance, then why did you add the difficulty slider? If people want to jump ahead by buying everything and getting maxed out armour, then let them. If they want to ruin the game for themselves, fine. Don't hinder the ones that DO want to play legitimate.

Thats all I have to say.