In this case the old set of facts is replaced with a new set of facts for the matching encounter.
Example:
<observation update_date="2008-05-04T18:13:51.498-04:00" sourcesystem_cd="PFT">
<event_id source="HIVE">100</event_id>
<patient_id source="HIVE">100</patient_id>
<concept_cd>LCS-I2B2:pulweight</concept_cd>
<nval_num>100.9</nval_num>
</observation>
<observation update_date="2008-05-04T18:13:51.498-04:00" sourcesystem_cd="PFT">
<event_id source="HIVE">100</event_id>
<patient_id source="HIVE">100</patient_id>
<concept_cd>LCS-I2B2:pulheight</concept_cd>
<nval_num>6.0</nval_num>
</observation>
<observation update_date="2008-05-04T18:13:51.498-04:00" sourcesystem_cd="PFT">
<event_id source="HIVE">100</event_id>
<patient_id source="HIVE">100</patient_id>
<concept_cd>LCS-I2B2:pulfev1pred</concept_cd>
<nval_num>76</nval_num>
</observation>

The rows in the OBSERVATION_FACT table before the update:

The rows in the OBSERVATION_FACT table after the update: