I will share this to you guys, so that what happened to my character does not happen to you.
When using free lesser reincarnation token, you have the following risk:
(1) you lose ALL your epic destiny XP, thus also your destinies and fate points.
(2) you lose all your favors
(3) you can no longer do Slayer missions on wilderness you had visited before you reincarnated.
(4) you lose all quests flags.
(5) in update 20, you may also permanently get stuck in your quest chain. Returning quests to their quest giver-NPCs fail to mark the quest as completed. In my case, this permanently blocks my access to Giant Hold Tor, and so also the subsequent raid.
(1) can be fixed, once you get to level 20, and if there is a kind enough in-game DM to fix you.
2,3,4,5 cannot be fixed. Especially 5 is very bad.
Most players do not experience this problem, but it happens to me now 2x already. So you are warned.
I hope Turbine is going to do something about this, because this is really really a ruining bug. The only consolation I get so far form in-game DMs is: "I'm sure the rest of the game is still fun" Wow.. not even a penny for comfort.