Tyrant, that is exactly what I am saying, I believe. The new field for number of reminder days is purely that. It tells PM to remind you when the number of days is up, but has absolutely nothing to do with the way the password looks.
For example, the number of days is 50 and the counter is blank. Then, after fifty days is up, you log into the website, log in, select to change PW. Here for the current PW, you would specify the password which is generated by PM with the blank counter field. Before you fill in the new password, you put a 1, or whatever character, into the counter field and populate the new PW field with the new PW, which has the one hashed into it. In order to confirm the new PW, you would put the same new PW in the box. Then, when you hit submit on the web site, you'll have a new PW. At the same time, you'll hit the reset timer button in PWM and the day count will start from the beginning.
Then, after 50 days are up, you'll go thru the same process except you would use 2, or whatever other character, in the counter field.