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Well, this can be replicated using a required boolean (drop-down) time tracking activity custom field without a default value. Now browse to project settings, time entries activities and try to disable an activity and click save. Now this change is not saved. Now try to set the custom field value for *one* activity and click save. This change is not saved either.
To get everything to work as expected _every_ _required_ time tracking activity custom field must have an actual value to get the save to store the config properly afterwards activities can be disabled/re-enabled/reset regularly. As such is the reset function in fact working as expected.

Edit: additionally, if you change the boolean custom field to display as checkboxes it works as expected without having the box checked. If the boolean display is set to radio-buttons the same behavior as outlined above kicks in.

I hope this helps.

Mischa.
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