I heard that story behind this is that one of close friends of ETH developers lost a few $M in smart-contracts, so they want to be able to update its source code to access the ETH, is that true? How would that work?
So its more like the cofounder of Ethereum lost $91 million dollars in his own wallet, using his own smart contracts, using the language he wrote.
I am against the proposal to undo the deleted multisig wallet contract. Everyone makes mistakes, some are worse than others. You can never learn if every mistake can be undone.
The desire to sort out how to do updates is motivated by much more than just that particular incident.
This post describes a strategy for writing contracts that proxies the actual implementation of the contract to another contract. If the contract needs to be modified, a new contract is deployed and the original contract is set to point to the new contract.
Edit: I misread your comment. There has been a discussion over of a possible hard fork in order to recover lost funds, but that's not what the author is referring to in this post.