Microsoft's recent Windows 11 updates caused a significant bug, breaking "localhost" HTTP/2 functionality and preventing applications from connecting to 127.0.0.1, leading to "ERR_CONNECTION_RESET" errors. This issue impacted critical software like Visual Studio debugging, SSMS Entra ID authentication, and Duo Desktop, disrupting development and security operations. Microsoft has since acknowledged the problem and released a Known Issue Rollback (KIR) update, which users can obtain via Windows Update, to restore proper connectivity.
Microsoft's recent Windows 11 updates, specifically KB5066835 and KB5065789, introduced a critical bug that impaired "localhost" HTTP/2 functionality, leading to "ERR_CONNECTION_RESET" errors for applications attempting to connect to 127.0.0.1. This directly impacted essential development tools like Visual Studio debugging and SSMS Entra ID authentication, alongside security applications such as Duo Desktop (DUO), disrupting critical enterprise operations. Microsoft (MSFT) confirmed the issue, attributing it to applications relying on the HTTP.sys driver, which also affected IIS websites. In response, Microsoft released a Known Issue Rollback (KIR) update on October 17, 2025, enabling users to restore proper localhost connectivity by installing the update via Windows Update. The incident, reflected in negative per-ticker sentiment for MSFT (-0.35) and DUO (-0.55), underscores the operational risks associated with OS updates for enterprises dependent on Windows-based development and security infrastructure. While resolved, it highlights the necessity for robust patch management strategies and thorough testing within corporate IT environments to mitigate potential disruptions.
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