It will then be necessary to re-import all of the new albums of course.
Only the new stuff imported since the Library Backup. I would rather do that, usually, than do an "Update library (from tags)" on all files. Particularly for a problem caused by clicking something at the wrong time. If the re-imported files have the correct tags in the files already, written there by MC, then re-importing them would be the equivalent of running "Update library (from tags)", but would only be necessary for new files since the backup.
Library Backups are fairly frequent, although not daily unless you set up MC to do that, as I have.
But yes, either method will work. If a lot of manual changes have been made to data in the Library, data which isn't written to tags, then the "Update library (from tags)" method would be better. So that would include a lot of View, Settings, and Playlist changes, although a Restore wouldn't need to restore settings, just Library and Playlists.
My concern would be that if Liminal has found this problem with Album names, what else might have been changed that hasn't been noticed yet?