To fix it there is usually a backup /etc/passwd~. Verify your username is at the end of the file and - if it is - use cp to replace the existing file.
sudo cp /etc/passwd~ /etc/passwd
No - passwords are never reset by an update.
Confused by the presense of a file named passwd.pacnew?
It would happen if you - without giving thought to the process - replace a configuration with a .pacnew file
Never automate .pacnew files - it may wreck your system completely.
Ubuntu doesn’t have .pacnew files
Manjaro is based on Arch. Manjaro is for the most parts a self-service system.
Yes - the manjaro-system script takes care of some of the tedious ripples discovered when upstream Arch makes important changes to the system - but in general the user is solely responsible for what happens with the system.
Updates never - ever - touches files in any user’s home - neither is local system configurations ever changed by overwriting or replacing files in /etc but instead the new configuration file is written with an extension of .pacnew - e.g. mkinitcpio.conf.pacnew or passwd.pacnew.
If you change an apps local - system wide settings - and then remove the app - the apps local configuration is not removed but is save using an extension of .pacsave.