Microsoft hasn't changed Windows 11 much since launch. Later in 2022 is when the next feature update will correct many issues, but that version will also be buggy for a few months. Considering that Windows 10 is also extremely buggy and sloppy, it is nothing new. Windows 7 was more stable from the first day than Windows 10 after 6 years, so the amount of time since launch is not necessarily correlated with stability.
Upgrading through Windows Update or Upgrade Assistant should have minimal effect on files, settings, and apps. When files are destroyed by updates, that is typically because the new code, and not because the update process. This was an issue with some Windows 10 feature updates over the years, but hasn't been one of the...