Windows 11 Patch Regression: Cloud Storage Apps Hang and Outlook PST Workarounds

Windows 11 users are again facing a fresh wave of patch-related breakage: a January 13, 2026 cumulative update (KB5074109) introduced a regression that can make apps unresponsive or fail when opening or saving files on cloud‑backed storage such as OneDrive and Dropbox — and the fallout has already reached everyday productivity apps like Outlook, forcing Microsoft into emergency fixes and sparking renewed questions about update quality and the role of AI in modern software development.

Background​

Microsoft shipped the January 13, 2026 security rollup (identified as KB5074109 for many Windows 11 channels) to address a range of security and quality issues. Within hours and days of that rollout, administrators and end users began reporting several regressions: Remote Desktop credential prompt failures and sign‑in problems for Azure Virtual Desktop and Windows 365, failure to shut down or hibernate on certain 23H2 systems with Secure Launch enabled, and application hangs or unexpected errors when interacting with cloud‑backed file stores. Microsoft acknowledged multiple of those problems and pushed targeted out‑of‑band (OOB) updates to mitigate the most disruptive gaps. One of the most visible consumer-facing problems isolated to day‑to‑day productivity was Outlook Classic (profiles using PST files). Users with PST files stored on OneDrive reported Outlook becoming Not Responding, being unable to reopen the application without killing the process, sent messages not appearing in Sent Items, and previously downloaded mail redownloading repeatedly. Microsoft’s Outlook advisory identified the link between PSTs on cloud‑backed folders and the January update, and the company recommended workarounds while it investigated. At the same time Microsoft issued emergency OOB remediation updates — for example KB5077744 and KB5077797 — to address Remote Desktop credential prompts and shutdown/hibernation regressions that emerged from the same January rollup. Those fixes reduced immediate operational pain for many enterprise customers, but they did not immediately resolve the cloud‑file application hang in all scenarios.

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What happened: the technical picture​

The patch and the regression​

The January security package (KB5074109) bundled a number of fixes and policy changes across Windows 11 builds. In Microsoft’s release notes it’s explicit that some of the changes touch components that interact with storage, authentication flows, and virtualization subsystems — exactly the areas where subsequent customer‑observed regressions appeared. Microsoft documented credential prompt failures and also flagged the Outlook/PST behavior as an active investigation. What’s notable is the pattern: the regression manifests during the I/O path when applications open or save files stored on cloud‑backed file containers (OneDrive/Dropbox). That means apps that assume traditional local file semantics — Outlook Classic with PSTs on disk is a prime example — can encounter unexpected locking, latency, or API behavior differences when the same files are stored through a sync client or cloud filesystem. The OS update appears to have altered timing or handling in some common underlying filesystem or synchronization APIs, exposing those fragile assumptions in applications. Microsoft’s guidance has focused on moving PSTs off OneDrive while a fix is developed.

The remediation timeline​

• Jan 13, 2026 — KB5074109 released (multiple Windows 11 builds).
• Jan 14–15, 2026 — reports surface linking cloud‑backed PSTs and application hangs; Microsoft posts interim Outlook guidance and opens investigations.
• Jan 17, 2026 — Microsoft issues targeted out‑of‑band updates (for example KB5077744 for the Remote Desktop credential/sign‑in regression and KB5077797 for the 23H2 shutdown/hibernation regression). These OOB updates were aimed at restoring critical functionality without removing security coverage provided by the January LCU.

The OOB patches addressed many — but not all — pain points. Crucially, the Outlook/PST problem tied to cloud storage remained an active investigation at the time Microsoft’s advisory was published; the company provided workarounds (use webmail, move PSTs off OneDrive, or uninstall the offending update) rather than an immediate hotfix. Administrators and end users therefore faced choices with real tradeoffs: remain protected from the month’s security fixes or avoid the operational disruptions by rolling back.

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How this affects users and IT​

Immediate user impact​

• Classic Outlook users with PSTs on OneDrive may see Outlook hang, require process termination or a restart to regain functionality, and experience mail‑folder inconsistencies. Microsoft explicitly documents these symptoms and lists moving PSTs out of OneDrive as the recommended interim step.
• Remote Desktop and Cloud PC users experienced credential prompt failures and sign‑in problems on Azure Virtual Desktop and Windows 365 until OOB fixes were released. For organizations reliant on Cloud PC infrastructure, this produced immediate help‑desk load and productivity loss.

Workarounds and mitigations​

Microsoft’s documented mitigations included:

• Move PST files out of OneDrive or stop syncing the folder containing PSTs. This restores local file semantics for Outlook Classic and avoids the cloud‑backed I/O behavior that triggers the hang.
• Use webmail (Outlook on the web) while the client‑side problem is investigated.
• For Remote Desktop sign‑in failures, apply the OOB fixes (for example KB5077744) rather than uninstalling the entire January update, preserving security coverage while restoring authentication flows.
• If necessary, uninstall the January 13 LCU (as a last resort) and revert to a previous build, then reapply mitigations once Microsoft provides a permanent fix.

Administrators should prioritize inventory and risk assessment: identify endpoints that host PST files in cloud folders, confirm which machines have Secure Launch enabled (for shutdown/hibernate regressions), and check Windows Update deployment rings to ensure OOB security and reliability patches (those KB50777xx packages) have been applied where needed.

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Context: is this a one‑off or part of a pattern?​

2025 and the start of 2026 exposed a string of high‑visibility regressions and emergency fixes for Windows 11. Issues ranged from Task Manager processes failing to terminate and File Explorer flashing a white screen in dark mode, to an incorrectly functioning Windows Recovery Environment and multiple out‑of‑band fixes for Patch Tuesday regressions. These incidents have been widely reported and tracked in Microsoft’s own release‑health pages and independent outlets. That history frames the January 2026 incident not as an isolated oddity but as part of a troubling cadence of regression and remediation cycles.

• The December 2025 optional preview update (KB5070311) introduced a File Explorer white‑flash in dark mode; Microsoft acknowledged the issue and rolled the fix into the subsequent Patch Tuesday release.
• Optional and preview updates in 2025 also left Task Manager processes lingering in memory; later cumulative updates included a fix for that behavior.
• October 2025 delivered a particularly disruptive Patch Tuesday that required an emergency hotfix to restore WinRE USB input, highlighting how some regressions affected recovery tooling and not just user‑facing apps.

Taken together, the sequence suggests testing and vetting gaps that allowed regressions to escape pre‑release rings and reach wide audiences. Whether the root cause is process drift in test coverage, faster release cadences interacting poorly with complex device/driver matrices, or model changes in internal development workflows is an important question — and it leads straight to the debate over AI’s role in coding.

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AI and “vibe coding”: could AI be part of the problem?​

In April 2025 Microsoft CEO Satya Nadella disclosed that roughly 20–30% of code in some Microsoft repositories was generated by AI or written with heavy AI assistance — a publicly stated metric that signaled how deeply generative tools have already been incorporated into big‑tech development workflows. Multiple major tech companies have publicly reported similar figures and ambitions for AI‑assisted coding. This disclosure sparked two predictable reactions: optimism about productivity gains, and concern that shifting code‑generation responsibility to AI could dilute engineering rigour or hide systemic regressions until too late. There are plausible pathways by which increased AI assistance could change bug surface area:

• Faster code generation increases churn. More lines of code being produced per engineer hour raises the volume of changes needing verification. If test coverage and automation don’t scale proportionally, regressions can slip through.
• Different kinds of errors. AI models can generate syntactically valid code that satisfies unit tests but makes assumptions inconsistent with platform semantics (for example, assuming local file semantics when the code will run against cloud‑backed stores). Those semantic errors are often invisible to narrow automated checks.
• Shift in reviewer emphasis. Human reviewers might focus on high‑level design and accept more AI output via “vibe coding” workflows — rapid prototyping and iterative acceptance — and that can reduce the manual scrutiny paid to edge‑case integrations, boundary conditions, or long‑running regressions.

That said, correlation is not causation. There is no public evidence that the KB5074109 regression was caused by AI‑generated code specifically, and Microsoft has not attributed the bug to AI usage. Senior engineering organizations routinely combine automated generation, human coding, code review, continuous integration, and staged rollouts; the presence of AI tools changes mechanics but does not deterministically create defects. The claim that AI is the root cause of declining update quality is therefore unproven and should be treated cautiously. Multiple systemic factors — complexity of modern OS stacks, interactions with third‑party drivers and sync clients, and the sheer diversity of hardware and enterprise configurations — remain central contributors to regression risk. Flag: this attribution is not verifiable with public evidence at present.

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Strengths and weaknesses in Microsoft’s response​

Strengths​

• Rapid detection and targeted OOB fixes. Microsoft’s release‑health approach and Known Issue Rollback (KIR) capabilities allowed relatively quick OOB updates (for example KB5077744 and KB5077797) to restore mission‑critical functionality without removing security coverage wholesale. That targeted response reduced downtime for many enterprise customers.
• Transparent public advisories. Microsoft published clear documentation on affected builds, symptoms, and workarounds (notably for Outlook PSTs and Remote Desktop credential prompts), helping admins triage risk and apply mitigations.

Weaknesses and risks​

• Regression frequency. The volume of high‑visibility regressions across late 2025 and into January 2026 suggests systemic issues in release validation for widely distributed binaries and previews. Critical pieces of user experience and recovery tooling (WinRE, Task Manager, File Explorer, and now Outlook) have been touched by regressions within a short timeframe.
• Residual incomplete fixes. The fact that OOB patches were required for some issues while others remained unresolved (or required file‑specific workarounds like moving PSTs) creates friction: administrators must choose between security and usability. This balancing act increases operational complexity and raises the risk of inconsistent patch posture across fleets.
• Trust erosion. Repeated regressions and emergency rollouts erode public confidence in the update pipeline. Users and IT teams may delay updates, which in turn increases exposure to unpatched vulnerabilities. That distrust creates a negative feedback loop for secure software lifecycle management.

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Practical advice for readers (concise, actionable)​

• Inventory: Identify machines with PSTs, OneDrive/Dropbox sync roots, and whether Secure Launch is enabled. Prioritize machines where PSTs are stored in cloud folders.
• Apply OOB fixes promptly: If you experienced Remote Desktop or Cloud PC authentication problems, confirm that KB5077744 (and any equivalent KB for your build) is installed. These OOB updates target those regressions while keeping the security LCU in place.
• Use recommended workarounds: Move PST files out of OneDrive, adopt Outlook on the web temporarily, or uninstall the LCU only if the operational impact justifies the security tradeoff.
• Staged deployment: For enterprises, continue using deployment rings and A/B testing. Expand canaries only after health signals are validated. Treat optional/preview updates differently from mandatory security LCUs.
• Monitor release‑health: Subscribe to Microsoft’s release‑health pages and your vendor ecosystem (OneDrive, Dropbox, email clients) to catch immediate known issues and recommended mitigations.

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Broader implications: quality, AI, and the future of patching​

The January 2026 events are a practical example of how modern OSs are complex, composable systems where a single LCU can surface edge cases across authentication, virtualization, file systems and sync clients. The industry is accelerating the use of AI to write and review code — and at scale that introduces both opportunity and new failure modes. The right response is not to ban AI from engineering but to evolve validation, observability and risk management to meet the changed velocity.
Concrete steps for the industry and Microsoft specifically include:

• Invest in broader integration testing with third‑party sync clients and enterprise default configurations, not just vanilla machines. Many regressions appear when the OS interacts with widely deployed user agents.
• Expand semantic testing and chaos experiments that exercise file‑I/O semantics under cloud sync scenarios. Unit tests and static analysis alone will not catch timing and locking races across cloud/sync boundaries.
• Adapt release cadence and rollout mechanics with more granular telemetry gating so that regressions that affect a minority configuration are caught earlier in staged distribution. Microsoft’s Known Issue Rollback (KIR) is valuable — but avoiding the regressions in the first place is superior.
• Create AI‑aware QA controls. If AI is writing substantial amounts of code, QA pipelines must validate not only for functional correctness but also for assumption validity (e.g., does the generated code assume local file semantics where cloud files will be used?. This requires new test categories and tooling that analyze intent and runtime assumptions. This is an ongoing research and engineering challenge.

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Conclusion​

The January 13, 2026 Windows cumulative update (KB5074109) and its aftermath illustrate the dual realities of modern OS engineering: patching remains essential to security, but the complexity of interactions between OS kernels, sync clients, virtualized services and user apps raises the probability of regressions. Microsoft’s quick issuance of targeted out‑of‑band updates and public advisories shows responsiveness, but the cadence of high‑impact bugs through late 2025 and early 2026 highlights a deeper need to harden release validation, especially as AI tools become more prominent in coding workflows.
The specific Outlook/PST issue tied to OneDrive and cloud‑backed storage is immediately solvable for most users via recommended workarounds (move PSTs out of OneDrive, use webmail or apply Microsoft’s remediation guidance). The larger questions — about update quality, pipeline rigor, and how to safely scale AI‑assisted development without degrading production reliability — will require sustained engineering investment and transparent, measurable improvements in testing and rollout practices. Until those systemic changes arrive, administrators and users should treat January’s events as both a call to cautious patching and a reminder to maintain solid telemetry, staged deployments, and contingency plans for critical apps.

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Source: Windows Central Broken patches and AI Code: Is Windows 11 beyond saving?

 

[ChatGPT]

Microsoft’s January 2026 cumulative security update, identified as KB5074109, introduced two separate regressions that left many Windows 11 users fighting either an app‑launch failure that produced error code 0x803F8001 or intermittent application freezes when opening or saving files stored on cloud‑backed folders such as OneDrive and Dropbox. The first failure mode prevented core utilities — Notepad, Snipping Tool and several OEM/Store‑backed utilities — from launching at all, while the second produced unpredictable hangs and data‑flow problems for apps that interact with cloud‑synced storage, most notably classic Outlook profiles that keep PST files inside OneDrive. These problems were widely reported across community forums and received formal acknowledgement from Microsoft; emergency fixes and partial out‑of‑band updates addressed some of the fallout, but the OneDrive‑related file I/O regression remained under active investigation at the time of writing. com](]) [HEADING=1]Background / Overview...7dd-6fc4-4c32-a471-83504dd081cb?utm_source=op Outlook guidance explicitly references the OneDrive/PST hang as an active investigation and lists recommended workarounds: move PSTs out of OneDrive, use webmail for continuity, or uninstall the update if a controlled rollback is appropriate for the environment. These recommendations acknowledge the incompatibility between legacy local file semantics and cloud‑sync semantics exposed by the update. [*]Independent reporting and community threads confirmed the partial fixes and the remaining outstanding cloud sync regression; high‑visibility outlets tracked the ongoing user impact as Microsoft verified and rolled patches. [/LIST]

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Why these bugs matter: architecture, assumptions, and the single‑point risk​

The two regressions reveal systemic tradeoffs in modern Windows packaging and cloud integration.

• Store‑packaging coupling: As inbox tools are migrated to AppX/MSIX and the Microsoft Store becomes the servicing surface, app entitlement and package registration become a shared dependency. That single point of failure means that a Store or licensing agent malfunction can temporarily “brick” unrelated utilities that historically would have been independent. The result is a much larger blast radius for what used to be localized failures.
• Cloud semantics vs. legacy app assumptions: Legacy Win32 applications assume deterministic local file I/O semantics — open, write, atomic close. Cloud sync engines introduce placeholder files, opportunistic upload processes, and asynchronous locks that change timing behaviors. When a system update tweaks I/O timing, locking behavior, or the integration points between the filesystem and the cloud sync client, legacy apps like Outlook can deadlock or misbehave because they rely on immediate, local file behavior. The KB5074109 incident exposed that mismatch in a production setting.
• Operational tradeoffs: For IT teams this produced a stark choice: install KB5074109 and close over a hundred security vulnerabilities (including multiple high‑priority CVEs), or uninstall the patch to avoid productivity impacts for critical workloads such as Outlook with PSTs on OneDrive. The correct answer depends on threat model,ses the right mitigation is selective: apply emergency KIRs where available, relocate PSTs to local storage, or implement targeted rollbacks in pilot rings rather than enterprise‑wide uninstall.

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Practical, prioritized mitigation steps (for users and admins)​

The fault modes are different, so triage diverges depending on the symptom you face. Use this prioritized playbook.

If you see 0x803F8001 (app won’t launch)​

1. Restart Windows (full reboot) to clear transient Store agent states.
2. Open Microsoft Store → profile → sign out, then sign back in to refresh account tokens.
3. Run wsreset.exe (press Win+R, type wsreset.exe, Enter) to clear Store cache.
4. Check system clock/timezone and regional settings (auth calls can fail with bad system time).
5. Settings → System → Troubleshoot → Other troubleshooters → Windows Store Apps → Run.
6. Settings → Apps → Installed apps → app → Advanced options → Repair (non‑destructive). If Repair fails, try Reset.
7. If the packaged app still fails, uninstall and reinstall it from the Store or vendor site (for OEM tools). For system inbox apps, re‑register AppX packages using PowerShell as an administrator:
   • Get-AppxPackage -AllUsers | ForEach‑Object { Add‑AppxPackage -DisableDevelopmentMode -Register "$($_.InstallLocation)\AppXManifest.xml" }
8. As a last resort, consider an in‑place repair install to restore the component store while preserving user files.

These steps are conservative and resolve many cases without uninstalling the security patch. If you manage many machines, test the re‑registration steps on a pilot group before rolling them into scripts.

If applications hang saving/opening files from OneDrive (Outlook/PST scenario)​

• Immediate user workarounds:
  • Move PST files out of OneDrive to a local folder (restore deterministic local file semantics). Microsoft documented this as a recommended mitigation.
  • Use Outlook Web (OWA) for continuityng developed.
  • If the environment permits, uninstall the KB update on affected machines after assessing the security risk — this is a last resort and not recommended in high-risk environments.
• Administrator recommendations:
  • Inventory devices that have PSTs or other legacy files stored in cloud‑synced locations and prioritize moving those files to local or network shares that don’t rely on consumer cloud sync semantics.
  • Use KIR/Group Policy where Microsoft provides it to prevent the regression from impacting large pools of managed endpoints.
  • Stage OOB fixes in pilot rings and verify interplay with backup and data‑protection systems (antivirus, DLP, endpoint backup) before broad deployment.

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Enterprise impact and operational cost​

For businesses the incident highlights hidden costs of cloud‑first convenience. Many organizations adopted OneDrive and cloud‑synced profiles to simplify device replacement, centralize backups, and reduce local storage needs — but putting PSTs or other legacy container files inside a sync client ties legacy application reliability to cloud syncing semantics. Remediation may require:

• local or corporate file shares.
• Changes in backup policy and endpoint storage allocations.
• Service desk surge capacity to handle help requests and to run re‑registration or reset procedures at scale.
• Targeted KIR deployment and careful staging of future cumulative updates in pilot rings.

For organizations with thousands of users, these steps are non‑trivial and may involve significant labor and storage re‑allocation costs. Microsoft’s acknowledgement and guidance help, but the practical lift remains on administrators to restore deterministic storage semantics for legacy apps.

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Quality control, release practices, and the AI coding question​

This incident is the latest in a string of high‑visibility update regressions that reached production during 2025 and into 2026. Observers and some industry reports noted more than 20 major update problems in 2025 alone, raising questions about testing coverage, rollout practices and the risk profile of broad cumulative bundles.
A frequently raised but hard‑to‑verify claim is whether increasing reliance on AI‑assisted code generation correlates with the higher frequency of regressions. Microsoft has said in public forums that AI tools are used internally to accelerate developer productivity; specific percentages and the extent to which AI‑generated code appears in shipped Windows components are not independently verifiable in full. Treat claims about exact proportions of AI‑written code and direct causation as unverified without further evidence. That said, the incident underscores the importance of exhaustive integration testing across Store entitlements, cloud sync interactions, and legacy application semantics — areas where subtle timing or API changes can create system‑level failures.
Flagged as cautionary: any assertion that AI‑generated code directly caused KB5074109 regressions should be considered speculative unless Microsoft provides an explicit, verifiable internal post‑mortem. The engineering truth is often more complex: multiple teams, overlapping servicing pipelines, and timing‑sensitive registration flows can interact to produce the behaviors observed.

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Security dilemma: you can’t choose safety without cost​

KB5074109 addressed a large body of security issues — the January rollup was intended to close a wide range of vulnerabilities, some of which were actively exploited in the wild. Uninstalling a cumulative security update is not a risk‑free option: it restores exposure to vulnerabilities that attackers may be actively exploiting.

• For organizations that cannot afford ongoing productivity outages, the viable path is to apply targeted mitigations (KIR, Group Policy) and move sensitive legacy data out of cloud sync locations rather than wholesale uninstall.
• For environments facing immediate, exploit‑grade threats,the operational cost of downtime against exposure to active zero‑day exploits. In many cases, the correct approach is layered: perform targeted rollback only where absolutely necessary while prioritizing immediate compensating controls (network segmentation, device isolation, additional EDR rules) to mitigate the security risk.

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How to prepare for the next servicing event: lessons for IT​

• Avoid storing legacy, monolithic data containers (PST, VM disk images, app cache blobs) inside consumer cloud sync folders. Treat OneDrive and similar clients as convenience sync tools — not as primary storage for single‑file containers required by legacy apps.
• Maintain a staged rollout: use pilot rings and phased deployments to detect regressions before wide distribution. Automation should include rapid rollback options and inventory hooks to locate users who keep PSTs (or other fragile files) inside cloud folders.
• Improve telemetry triage: collect application hang dumps, File Explorer/RPC logs and OneDrive client traces to accelerate root cause analysis when edge cases arise.
• Run integrlate cloud sync latency, placeholder files, and File I/O locking races on legacy applications, not just unit tests that validate API contract conformance.

These operational changes reduce the blast radius when platform updates modify low‑level timing or integration semantics.

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Final analysis and takeaway​

KB5074109’s January rollout demonstrated both the benefits and the fragility of a cloud‑connected, modular Windows: the Store and cloud integrations enable rapid updates and feature velocity, but they also create shared dependency surfaces that can multiply the impact of subtle faults.

• The 0x803F8001 entitlement/Store problem showed how package registration or licensing handshake failures can temporarily disable core utilities that users expect to be always‑available. Many of these cases are remediable with standard Store cache resets, sign‑in refreshes, or app reinstallation, but the event highlighted a systemic single‑point risk created by Store servicing.
• The cloud I/O / OneDrive regression is the more consequential long‑term problem: it exposed an architectural mismatch between legacy application expectations and modern cloud sync semantics. Until Microsoft ships a definitive fix, the only reliable mitigation for affected workflows is to move legacy files like PSTs back to local or managed network storage and rely on web‑based clients where appropriate.
• Administrators must now balance security and reliability: the January update fixed serious security issues and included patches for actively exploited vulnerabilities, but it also required immediate operational triage that cost time and, in many environments, temporary productivity loss. The pragmatic approach combines selective KIRs, pilot‑first deployments, file migration, and conservative update staging.

This incident should prompt two clear actions for Windows users and IT teams: (1) re‑audit where legacy container files live and remove them from consumer cloud sync folders, and (2) reinforce update staging and rollback procedures so that security and reliability can be balanced without forcing a binary choice between productivity and protection. The technical fixes are in progress; the practical work for administrators and users begins now.

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Conclusion
The January 13, 2026 Windows cumulative update (KB5074109) delivered critical security hardening but also revealed brittle interactions between Store‑serviced apps and cloud‑synchronized file semantics. Microsoft’s emergency patches and documented mitigations restored launch behavior for many affected applications, and the company continues to investigate the OneDrive/PST hang that remains disruptive for some users. In the interim, moving legacy files out of consumer cloud sync folders and following the prioritized remediation steps described above are the fastest, lowest‑risk ways to restore predictable productivity while retaining an effective security posture.

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Source: WinBuzzer Windows 11 January Update Breaks Notepad, Snipping Tool and Other Apps - WinBuzzer