Does 301 redirect loose link value?

[frank]

Hi,

Yes. 301 does not retain all of the "link juice" it could have, so updating the original link is the best solution.

If we update the old link, what about the 404 error? If the website is getting the maximum traffic from the specific URL and you just modified it without proper redirection, it will cost you loss of visitors.

A proper 301 redirect doesn't loose link value at all. Its a misconception.