If a user begins to complete a simple bug report, but decides they need the advanced form, clicking said link destroys all data entered up to that point.

Ideally, all forms should be aware of all changes to their fields, and preserve all data until a processing action is completed. This could be accomplished by maintaining session state (via PHP or in temporary tables). If a processing action will result in data loss (say, they switched to a simple report, but had put something in a advanced-only field that we aren't going to store), a warning should be elevated to the user interface level.

Mantis does this in several places, and rarely (if ever) warns the user - it just chucks data. That's bad for data quality, and it annoys the reporters.

In short, my thoughts are:
1) Always preserve user data until you're positive they don't need it anymore.
2) If you aren't sure, ask the user.
3) If you don't trust the user's selected action, warn them with a well-worded error messaage.
4) Don't bother warning on few-to-many processing actions (as they wouldn't result in data loss).
5) ALWAYS warn on many-to-few processing actions, as the user may not understand that the scope has changed.