Haven’t checked your savefile yet, but I had a game from r699 and most of my hearthlings were also happy, and they are still happy after reloading.
Happiness is changing constantly due to thoughts, it might have been caused by positive thoughts disappearing or negative thoughts appearing, making the mood of your hearthlings to drop quickly.
Edit: After loading the savefile, it might seem that all of them reset, but some of them have different values and were transitioning left or right in the happiness bar, so it should still be working.
Could it be due to the Township Celebration thought disappearing a while before you saved?
There’s only one hearthling that is close to becoming merry, and he has the ‘Pioneering spirit’ thought (one of your latest hearthlings, I assume).