So, yes it will fix a lot of problems. Anything that is a problem because of the state of the current map can be fixed with this. Some things that can be fixed -
The keep
Killed Yanmir wrong or not at all
Can't kill the Terror in Thronheim
Can't get through the portal in the Dark Passage or solve the mirrors
Made the Priests mad at you in the monastery
etc.
But, since you're causing a repawn, you'll have to fight all the monsters again and any chests will restock. So, if the area has a black chest you'd better open it the first time or you'll lose its original artifact forever.