Turns out the three step feature was a feature and not a bug. They disabled it due to strain on the servers. I think the real reason was to prevent people from entering places that they were not supposed to. I'm sure they will develop something else to make the users happy. Hopefully its soon rather than later. The three step feature is a major attraction to the game, if it is not included or something similar, then the game loses its luster.
Also, it looks like some people had their accounts reset back to level 1 after the update.