I've tried creating a new theme, tried renaming transcodedwallpaper.jpg to .old, but although these changes allow me to restore my graphic wallpaper, after restarting, the desktop wallpaper is black again.
Icons and start bar colour are unaffected.
The only solution was to uninstall the update. But now my pc is less secure.
Microsoft, please fix this!
Update: Thanks to those who posted workarounds. Whilst I have implemented the workaround, I had to resize my wallpaper to perfectly match my screen resolution, otherwise it looks awful without selecting 'Stretched'. It seems to stay upon restart. But I can't mark this as solved because the security update bug has not been actually fixed and continues to limit how I choose to use my wallpaper.