Your tag that renders #index is not data-bound. You need to write either:
<span>{^{:#index + 1}}</span>
or
<span data-link="#index + 1"></span>
Calling $.observable(people).refresh(people);
will work because it re-renders all the items, rather than incrementally inserting or removing. But the approaches I suggest above are better since they allow the insertion and deletion to be incremental.