Yes, unfortunately, updates do remove the previous directory.
Remember that it’s a good idea to use a child theme and avoid changing core files when possible, unless you’re comfortable trying to keep track and keep up with the changes.
If you need to use the built-in default theme without worrying about changing original files then try the attached plugin. I use it to clone an installed theme.
Note: It is in beta since I haven’t finished adding the downloading of the saved archive.