After title update 1.1.2, my Moonlight Dane Axe was reset to "Superior" (lowest quality) even tho it was "Mythical" (highest quality) in the 1.1.1

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The quest says that the ceremony cannot begin without Halfdan and that he's outside. I game him face down dead on the floor with his dog sat next to him. I can interact and speak with him, but he's unable to make his way inside due to him being dead. He also has the blue loot lights coming out of his back.

I've tried fast travelling, meditating and replaying from an older save point but he's always dead and my game progress is blocked.