Microsoft has confirmed another problem affecting recent Windows 11 updates, with some users reporting that their desktop wallpapers and other personalisation settings are being reset.
The issue follows another recently acknowledged bug that can cause problems with the mouse cursor. The latest problem is tied to Windows 11 Build 26200.9278 and later, where the desktop background can unexpectedly revert after a restart or change without warning. In some cases, affected systems may display a completely black desktop.
Microsoft has now documented the problem in its Windows release health information, confirming that several personalisation features can also be affected.
Windows 11 can lose desktop personalization settings
According to Microsoft, affected computers may be unable to correctly restore customized desktop settings. The problem occurs because Windows fails to load the relevant settings properly, regardless of which values the user has selected.
When that happens, Windows can fall back to a default black background.
The problem is not limited to wallpapers. Microsoft says other desktop personalization functions may also stop working correctly, including slideshow configurations and contrast themes. Some users have additionally reported problems with options related to hiding desktop icons and loading personalization settings.
That makes the bug particularly frustrating because it affects some of the most basic aspects of the Windows desktop experience.
KB5120998 is behind several recent Windows 11 problems
The wallpaper problem is associated with KB5120998, which was released on August 27, 2026, and brings Windows 11 to Build 26200.9278.
The update is significant because it introduces several changes that users have been requesting, including a movable taskbar, Bing-free Windows Search and a resizable Start menu.
However, some of the same changes being introduced through the update are also connected to newly reported problems.
One issue can cause the mouse cursor to become unusually large, change color or lose its customized appearance. Another affects desktop backgrounds and personalization settings. A separate problem can cause Outlook and Teams to crash, although that issue is limited to Windows 11 devices using ARM processors.
The problems may not appear immediately
One reason the bugs can be difficult to identify is Microsoft’s approach to rolling out new Windows features.
The changes included with KB5120998 are being distributed gradually through Microsoft’s Controlled Feature Rollout (CFR) system. This means installing the update does not necessarily activate every new feature or change immediately.
As a result, a computer can appear unaffected for several days after installing the update. The problematic feature may simply not have reached that particular device yet.
Once the relevant component is activated, however, users could suddenly encounter the affected behavior.
Microsoft has also indicated that it cannot simply roll back the problematic cursor or desktop changes on individual systems while the rollout is underway.
The phased approach has an obvious benefit because it can limit the number of users exposed to a problem at the same time. However, it also means that a computer that initially appears stable can develop the issue later when the relevant feature is enabled.
A fix is expected before the next Patch Tuesday
Microsoft says it is working on a solution and plans to release a fix as soon as possible.
The next major scheduled Windows security update is Patch Tuesday on September 8, making it a likely opportunity for Microsoft to address the problems before the affected features reach more PCs.
Until a fix is available, users who depend heavily on customized desktop settings may want to think carefully before installing KB5120998.
The decision is not entirely straightforward, however. The update also includes several major Windows 11 changes, including features that users have requested for years.
For those who prioritise system stability over new functionality, waiting for Microsoft’s corrective update may be the safer choice. Users who want the latest Windows 11 features will need to weigh those benefits against the possibility of encountering the wallpaper, cursor or other reported bugs.
This version keeps the technical details and chronology while removing opinion-heavy phrasing and presenting the information in a more neutral news-reporting style.