installing latest windows 10 update is deleting user files, specially under \pictures, \documents etc.( Temporary Bug) will be fixed soon !

Folks, make sure to backup the files from user profile, before you install the latest windows 10 update.

It seems installing latest windows 10 update is deleting user files, specially under \pictures, \documents etc.

Other  Details :

1. Does the problem affect all four account types - Microsoft account, local account, on premises AD account, Azure AD account?
yes

2. Does the problem only affect files below c:\users\<username> or are files in other directories and / or on other drives also affected?

only user profile location

3. Is there a recommended / feasible way to recover deleted files?

3^rd party file recovery tools

4. Will the OS upgrade offered through Windows Update, be corrected?

absolutely.

It is recommended to wait with 1809 upgrade !!!!

Improving chances of data recovery Here are a few things to keep in mind to improve the likelihood of recovering data.  1. Keep the device in its current state. If it’s turned on, leave it on. 

 2. DO NOT shut down and restart the device. Services and applications that start on a reboot may write logs and other information and inadvertently overwrite what would have been recoverable data.

  3. DO NOT rollback to an older version of Windows. This will cause more writes to the storage medium and may overwrite deleted files, reducing the likelihood of data recovery. 

4. DO NOT continue to use the device once you’ve established that data has been lost. This means, do NOT install new applications or start already installed applications. Actions such as browsing the web will create temporary files that may overwrite potentially recoverable data. 

5. DO NOT copy new files to the device .

Wait for the Microsoft Public documentation.