The problem seems to reside in the way that Microsoft have made changes to the manner that apps can access webcam video streams. The update was supposed to allow multiple apps to access webcam streams at the same time without affecting streaming.
Essentially, the change was made so that apps such as the Windows Hello webcam authentication or HoloLens would still work even the user also had Skype running.
But it didn’t work out like that for many users with complaints sky-rocketing around the world from people with both inbuilt and external webcams.
Microsoft have said a fix is imminent, but as of the time of writing, no official news of a release date was forthcoming.
People initially started reporting webcam issues in early August, when the anniversary update automatically started installing itself on people’s machines.
The problem is that video footage could not be streamed or would freeze a short time after starting.
To get technical for a moment, the issue is to do with changes to how video encoding Windows 10 is handled by the OS. Before the update only one program or app could use a stream at any one time when it was being shot. Changes to the way that Windows 10 makes sense of updates have exacerbated the issue. Before the anniversary update, it was possible for any user to roll back to a previous version of Windows 10 within 30 days of an update being installed, but that length of time was cut back to 10 days after the August update.
The cut back in the number of days to uninstall updates seems to have caught the majority of Windows 10 users on the hop, as well.