tedster - 9:15 am on Sep 13, 2012 (gmt 0)
This made me think that what they are actually doing is changing/matching queries into pre determined stored key phrases, most likely designed to reduce database stress
And that predetermination is probably aimed at phrases where the SERP shows higher user satisfaction, I'd think. But it certainly can have the effect of burying your search traffic levels, even when you rank #1, if your phrase used to appear in the auto-complete suggestions and no longer does, or has slipped down the list.
And you're right, xcoder - if one of your terms is now replaced by a synonym then your are often in deep trouble unless you also rank for that search too.
I always advise clients not to depend 100% on the Adwords Suggestion tool - it's main purpose is to sell ads, after all. These updates to the Suggestions seem to be very common, and not done in a global batch, so we seldom talk about them here. But they are a kind of update and they can have a major effect on traffic.