Update Microsoft has just announced on their forums that this particular issue has now been fixed
Original story In the Xbox One system preview program? You're going to want to decline any system updates you're asked to download in the near future. Microsoft has identified an issue that could cause a small sub-set of consoles in the public preview to factory reset after downloading.
Here's the full messages from Microsoft staff in the Xbox Forums:
Xbox Preview Participants,
Due to an unforeseen issue with our update system, if when powering on your Xbox One console you are asked to download a system update, please decline it. By declining the update you will go off-line and not be factory reset. Please leave your console powered on until further notice.
We've identified an issue that could cause a small sub-set of consoles enrolled in Public Preview to factory reset after downloading the latest system update (deleting all local hard drive content). Note that a factory reset does not impact profile settings or game saves (which are synced to our servers when you connect to Xbox Live), or content stored on an external hard drive. For now, please decline the system update until we can address this issue on our end.
If you're not in the public preview program you can rest easy, those of you in the program will want to decline the update. Users on Reddit are stating the update size is around 1900 MB, so hit decline if you see that.
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