The problem doesn't have anything to do with the update. It's caused by the lines of the objects required by GSX not being added in the FSX.CFG. Of course, the GSX Update DOES normally add the required lines, under normal conditions.
If it hasn't on your system, it's usually caused by a problem of your FSX.CFG being the wrong one, usually because of a problem in your registry keys so, the GSX Update is tricked into updating the wrong FSX.CFG file, because your registry keys are wrong.
Do you have FSX:SE ? If yes, do you have the regular FSX installed too ? If no, do you have this folder ?
%appdata%\Microsoft\FSX-SE\FSX_SE.CFG
If yes, it means your registry keys ARE wrong, because that file is not supposed to exists on a clean FSX:SE installation with no regular FSX installed at the same time. This is usually caused by having installed FSX:SE when the original FSX was still installed, and having removed FSX without reinstalling FSX:SE
However, the current version of the FSDT Live Update has been updated to deal with this mistake in your configuration so, it will update both FSX.CFG files, even if they shouldn't be there.
Another possible reason for the lines not being added to your FSX.CFG file, is that it was ALREADY corrupted, so the GSX update didn't touched it.
Another possible reason for this problem, is that you used a 3rd party utility to restore the FSX.CFG to a previous state, one without the lines containing the paths to find the GSX Simobjects, or you reset the FSX.CFG manually.
If the FSX.CFG is reset for any reason, you must run the FSDT Live Update again, so the missing Simobject lines will be placed back.