They must have expected this when they changed the latest xcode to allow free personal provisioning.
There's already some significant annoying limitations, in particular short provisioning expiration limits (must reinstall the app every 90 days), and no access to services like push notifications.
Yes, once a provisioning profile expires, apps built against it fail to launch.
You have to rebuild and reinstall the app (with an updated provisioning profile, but Xcode takes care of all that behind the scenes now) to get an expired app working again.
There's already some significant annoying limitations, in particular short provisioning expiration limits (must reinstall the app every 90 days), and no access to services like push notifications.