As a workaround for those who had already lost files, the company advised, "If you have manually checked for updates and believe you have an issue with missing files after an update, please minimise your use of the affected device and contact us directly".
Some users who manually downloaded the update are finding that data contained in their Documents, Pictures, and Music folders has been deleted, or otherwise hidden from view.
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An alarming number of users have taken to social media forums and Microsoft's own support website to complain about the serious issue. "This included many crucial documents and financial info", read a user-complaint on the Microsoft support page.
Users have complained that they have lost files from the C:/Users/[username]/Documents/ folder. If that doesn't work, the issue escalates to a NTFS file system recovery process, which depends on the missing file data not being overwritten.
It appears that the problem has been around in Insider builds for anything up to three months, however because it affected a tiny proportion of users, the feedback wasn't escalated to the level of "showstopper" and a result got out into the wild.
The Wondows 10 update rolled out globally on October 2.
The October 2018 update was revealed last week and will bring with it a few new features, like a supercharged clipboard and screenshot tool as well as dark mode for nightime viewing.