The Halacha requires that Sisit be made "Ta'aseh-V'lo Min Ha'asuy"-tied initially to a Kosher four-cornered garment. If one tied Sisit to a three-cornered garment, which is not obligated in Sisit, and then added a fourth corner, the first three tassels are invalid. Since they were attached at a stage before the garment was obligated it is considered "Min Ha'asuy"-already made.
The Mishna Berura (Rav Yisrael Meir Kagan of Radin, 1839-1933) discusses a case in which someone tied all four tassels to a valid four-cornered garment. Afterwards, one of the corners became rounded, rendering the garment unfit for the Misva. After he fixes the rounded corner, does he have to untie and retie all four Sisit? On one hand, he followed the rule and attached all four tassels to a valid garment. On the other hand, as soon as he fixes the corner the Tallit becomes valid retroactively. The Mishna Berura is stringent and rules that he must retie all the Sisit.
However, Hacham Ovadia cites many other sources that are lenient and permit such a Sisit, and this is the conclusion of Halacha Berura. Hacham Ovadia related that this once happened to Hacham Ephraim Kohen, and he brought the question to the then young Hacham Ovadia. Hacham Ovadia ruled that he did not have to retie all the Sisit. Hacham Ephraim agreed with Hacham Ovadia in principle, but he was stringent on himself and retied the Sisit. Nevertheless, the Yalkut Yosef in English concludes that it is preferable to take the Mishna Berura's opinion into account and retie the Sisit.
SUMMARY
If a corner of a Kosher Tallit became rounded, one is not obligated to retie the Sisit after fixing the corner, but it is preferable to do so.
