I was just messing with my phone (trying to figure out something that’s still eluding me) but I reverted back to Windows Default instead of Sense as my UI. And while I was looking through the default Windows contacts pages (which are actually nice in their latest versions) I noticed that my wife’s contact information had HTC Favorite as a category she was a member of. I know I didn’t do that myself so I figured that was how HTC was restoring my contacts when I flashed. I went to my PC, opened Outlook, changed another contact to add HTC Favorite as a category, went to Sense and sure enough there was a new favorite person added to my list. Oddly, in Sense the ‘category’ is not a visible item to look at.
So if you want to control your favorite people in TF3D just add a category.