The update that caused the issue is been identified, and Microsoft has already released the patch to fix the update.
The update bearing the number KB4074588 seems to be causing the issue.
Quick Fix for the Issue
- Select Troubleshoot -> Advanced Option -> Command Prompt.
- On the command to get a list of installed Windows Updates type dism /image:D:\ /Get-Packages /format:table
- Verify the list continues Package_for_RollupFix~31bf3856ad364e35~amd64~~16299.248.1.17
- Remove the package dism /image:D:\ /Remove-Package /PackageName:Package_for_RollupFix~31bf3856ad364e35~amd64~~16299.248.1.17
- Restart the system after DISM finished.
- The system will boot back to the Windows Logon screen and you should be able to log in and work as usual.
How to fix the USB not working after the Windows Updates
- Download the "Show or hide updates" troubleshooter package now.
- Save it to the desktop.
- Navigate to the Windows desktop and double-click on wushowhide .diagcab.
- Click Next and wait for the application to display the list of installed updates.
- Check KB4074588.
- Click Next and follow the prompt(s) to remove the update
- Restart the system. Keyboard and Mouse functionality should be restored and you should be able to log back into Windows.
Other ways to fix the USB not working.
- Open Device Manager by pressing Windows key + X and select device manager from the list. If you're prompted for an administrator password or confirmation, type the password or provide confirmation.
- In the list of hardware categories, find and expand Universal Serial Bus controllers.
- Right-click every device under the Universal Serial Bus controllers node, and then click Uninstall to remove them one at a time.
- Restart the computer, and let the USB controllers get reinstalled.
- Plug in the removable USB device, and then test to make sure that the issue is resolved.
If still the issue persists, continue next step to perform the reset on the computer.