Maybe im a little late to this party, sorry guys.
Yes, removing an instance index from the component effectively makes every instance with a higher index than the one removed to go down one position.
If you have your instances indexed (which i really recommend you to) with a class or struct that holds their data (component index, instance index, transform, etc), you should decrease every instance index that has a higher instance index than the one removed to keep your data on par.
Cheers! I hope you solved it!