A 383

Based on the way it's worded, I'd say our human now has a +2 racial bonus on saving throws. To me, the key is this wording: "Her halfling racial bonus on saving throws increases to +2." (emphasis mine.) The prestige class ability sets the bonus at +2, regardless of what it was prior.

That said, I do think an argument could be made that the ability has no effect. This is a question that may not have a 100% RAW answer, in my opinion.