In a blog post, the company says the number of customers impacted by the bug was small, with "reports of data loss" limited to "one one-hundredth of one percent of version 1809 installs."
We have fully investigated all reports of data loss, identified and fixed all known issues in the update, and conducted internal validation. Also, Microsoft Support and our retail stores customer service personnel are available at no charge to help customers.
Rather than immediately make the updated bits available to the public, Microsoft says it's limiting the initial release of this update to devices that are part of the Windows Insider Program. Devices configured for the Slow and Release Preview rings should receive the new build.
We will carefully study the results, feedback, and diagnostic data from our Insiders before taking additional steps towards re-releasing more broadly. [...] Once we have confirmation that there is no further impact we will move towards an official re-release of the Windows 10 October 2018 Update.
For those who previously installed the October 2018 Update without incident, Microsoft released the first cumulative update as part of the scheduled Patch Tuesday releases, The update incorporates a few additional fixes, including a remediation for a bug that incorrectly deleted user profiles on systems with a specific Group Policy enabled. More details are available in KB4464330. The cumulative update takes Windows 10 to version 17763.55.
Also included in the most recent round of updates is a new servicing stack update for Windows 10 version 1809, documented as KB4465477.
According to Microsoft's John Cable, Director of Program Management, Windows Servicing and Delivery, the original problem occurred on systems where Known Folder Redirection (KFR) had been previously enabled but some files remained in the original location. If, for example, you moved the Documents folder from its location in the user profile to a new location, such as a secondary data drive, but some files remained in the old location, the setup logic for the version 1809 upgrade removed the folder in the old location as well as all of the files in it.
As I had speculated earlier, the problem also occurred on some systems that used the relatively new Auto Save feature in OneDrive to relocate the contents of the Desktop, Documents, and Pictures folders to corresponding locations in the cloud. Here, too, the bug was triggered when some files remained in the old location.
Microsoft says it has fully investigated the issues and has resolved all the scenarios under which data could be lost, keeping all files in the original folder location and relocated folder intact.
If Microsoft's estimation of the percentage of affected users is accurate, it's likely that a few hundred people were affected by this bug. The company says it will offer data recovery options but cannot guarantee the outcome of any such recovery efforts.