Microsoft has confirmed that desktop settings are lost or reset on some Windows devices after installing the KB5120998 August 2026 preview update.
Microsoft's confirmation follows a wave of user reports saying their wallpaper switched to a black background automatically after installing this Windows update.
The known issue impacts systems running Windows 11 24H2 and Windows 11 25H2, and it may affect the wallpaper, the desktop theme, and various other settings.
"Following installation of Windows updates released August 27 2026 (KB5120998) and later, some Windows Desktop settings fail to load, resulting in desktop backgrounds displaying as a solid black color," Microsoft said in a Windows release health update on Wednesday. "It is possible other desktop settings may be affected, such as slideshow settings or contrast themes."
According to Microsoft, because of this bug, users will also be unable to restore their custom settings on affected devices.
"On affected devices, attempting to manually restore customized settings does not work. This is because the issue prevents the correct loading of settings, regardless of their value. In this case, a default black background is used instead," the company added.
KB5120998 was released on August 27 with Start menu, taskbar, and Windows search improvements for Windows 11 versions 25H2 and 24H2.
As Microsoft acknowledged one day later, this preview update also changes or resets mouse settings and makes it impossible for affected users to restore the previous settings after they are reverted.
Since KB5120998 is an optional, non-security update, users must click the "Download and install" link. However, if they already have the "Get the latest updates as soon as they're they're available" option enabled, the update will install automatically.
Microsoft addressed a similar bug six years ago, in February 2020, after the KB4539602 update broke desktop wallpaper functionality and caused Windows 7 wallpapers in 'Stretch' mode to display a blank black screen.
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