The update was only available to people who clicked on check for updates and was not rolled out as an automatic update. According to Microsoft the issue was a result of the update deleting folders used in Known Folder Redirection (KFR). KFR is used to change the location of files known to the folder, such as redirecting the documents folder to a folder on another drive or to redirect to OneDrive. If the files from the original folder were not moved to the redirected folder the update deleted the folder and contents in the original location.
This has resulted in some users losing important data and while Microsoft is trying to recover data for users who have been affected, they admit on their blog that they cannot guarantee the outcome of the file recovery work.
The update has now been pulled and the issue has been identified and fixed. The update is available to windows insiders so Microsoft can monitor feedback before widely re-releasing the October update. While this issue only affected a relatively small number of users it still highlights the need for regular backups and recovery solutions, for both business and personal data especially before making changes to a machine.