Exactly the same problem here with my Daughters laptop.
Last update (21/2/2018) completely screwed the keyboard and mouse drivers. We performed a system restore to go back to previous working configuration and were prevented by the Spotify app. Tried all earlier restore points and they all fail.
System Restore failed to replace the file
(C:\Users\XXXX\Appdata\Local\Microsoft\WindowsApps\Spotify.exe with its original copy from the restore point)
An unspecified error occurred during System Restore. (0x80070780)
Now people are trying to point at Spotify as being the villain (which they are) but it is CLEARLY Microsoft on both fronts.
1/. Microsoft have released an update with inadequate testing that has trashed many peoples machines.
2/. Microsoft have a huge hole in their system integrity tools which will allow a third party app to destroy the Restore functionality. Restore functionality should and must be BULLET PROOF.
This has been going on since November now without even being acknowledged by Microsoft, let alone coming up with a fix and work around to repair a system that has been trashed by their actions.
Now I have never been a fan of Apple but I am starting to think they can't be worse than this steaming pile of ****.
I am now faced the unwelcome prospect of having to completely rebuild the machine from scratch and re-install all the endless updates and desktop programs after having wasted a full day and 450km to drive to my daughters University to recover the machine to work on it.
Shame on you Microsoft.
Has anyone else found a workaround for this problem?