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Best thing you can do is try. No harm making a backup. Make sure you remember whatever password you enter. And yes, Sprite will always put 15 *'s for the password. This makes it harder for someone accessing the backup file to guess your password.
When I had this same problem, it disappeared after hard-resetting. However, when I restored the Sprite backup from the moment before the hard-reset, the problem came back. Again, this was related to some crappy software accessing my BT GPS.
Do you know what you were using your BT for prior to the problem?
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