The olfactory nerve system is a highway for viruses that leads straight to the brain. I grew up always believing in the mythical blood brain barrier shell that protected the brain. The blood brain barrier does exist with quite an extensive filtering system but there is the utility cable conduit system (nerve trunk lines) entrance which is as big as an open barn door. Fortunately it takes a long time, sometimes decades, for viruses and other things to make their way along on the nerve trunk lines, which is why the sense of smell gets messed up long before the brain starts experiencing problems. That gives you plenty of time to try to get rid of it. Most nerve cells don't grow back but the nose is different. It almost seems like the olfactory system is a disposable bumper that can take a bruising and then replenish the damaged cells. This can take up to 2 years. If the sense of smell is still not working as it used to after 2 years, it probably isn't coming back like it was.
The big mystery is why this doesn't happen all the time, the same way you can count on a skin cut healing up without you having to do anything special. Perhaps it could be because you didn't get rid of whatever is attacking the nerves, so the nose doesn't get a chance to rebuild its sensor system. Toxic substances can also cause the same kind of damage.
Nerves have a protective covering, called myelin, that protects the nerves. Most likely this is the actual highway viruses take to get to the brain, and in the past if it got damaged, the nerves underneath could also be damaged. In a lot of cases It was also considered not able to regrow it itself but in 2019 it was shown in a study with mice, that a synthetic molecule called sobetirome efficiently repairs damaged myelin without side effects. Long tern damage to the myelin causes the nerve signals to be degraded, the same way a water hose with holes in it, loses pressure and water. This can result in impaired motor responses, such as walking.
In 2020, it was reported in rat studies, that there might be chemical solutions for a variety of nerve disorders, including alzheimer’s disease and multiple sclerosis. In particular, the sobetirome molecule can apparently also help to rebuild the connections between nerve cells in the brain. When the insulation of nerve cells is lost in the brain, the insulation repair mechanism usually isn't robust enough in most people to repair the lost insulation. What happened to the repair system efficacy is anybody's guess at this point in time. I wouldn't be surprised if the micro environment around the nerve cells wasn't effected by the degrading macro environment that we live in.
When functions are damaged in the brain, it can automatically go into relearn mode where functions are transferred or taken over by other undamaged areas of the brain. This is probably plan b, because the repair of the damaged areas would make more sense than packing up everything and moving it somewhere else.
Study shows promise in repairing damaged myelin
www.bbc.com
, which I only started eating again when I was 6 years old. 
