Neither the basic theme or any theme that does not include changes to the default system files will be overwritten by the upgrade process. Only when default system files(outside of the assets/common/themes/themename folder) are modified will you lose changes made to the theme.

A backup archive of every file in the folder for the website(inetpub\wwwroot\zedsuite) is made and placed in the installer directory C:\Program Files\zedIT..\Installer, so you will always have a backup of the files as they were. There is also a backup of the db made and placed in this folder as well, so any changes made to the theme in a theme slot(stored in db) will be backed up.

Also, although the upgrade replaces all files in the website folder, a list of only those files that were changed in the patch is included in the release notes. Meaning, you then only need to merge your custom changes made to default system files for the files that were changed in the patch; all others you can simply overwrite the new file with your custom changed file.

Say for instance patch 7.1.1 had an update to /commerce/cart.aspx and you have modified /commerce/cart.aspx as well. The upgrade will archive your file and replace it with the new /commerce/cart.aspx. Since this file was modified in patch 7.1.1 you should merge your changes into it.

If however, you modified /commerce/shipping.aspx and patch 7.1.1 did not change this file, you can simply place your custom shipping.aspx back, and overwrite the distributed shipping.aspx that came with 7.1.1