After doing some experimenting, I can say this:
This bug is consistent for me. It happens on every lot.
It happens with or without MOO on. I first noticed it when dropping the walls to play the game in my main house, and I only turn MOO on to do some creative plant placement. Like I said before, I can still get things on the walls with MOO on, they just never disappear when I cut the walls away anymore.
It does not affect windows or doors, just stuff like shelves, art, or wall decorations.
The main house I play in only has a few internal diagonal walls, and all but one of them is only one square, so this took a while to figure out, but what is actually happening in my game in the scenario other people in this thread are experiencing. The game is snapping objects to place in between squares on diagonal walls, and I only figured it out after fiddling with a longer wall. I have two screen shots of the same wall, one with walls up and one with walls down to show that an object placed in between squares disappears when I cut the walls away, but the stuff on the other side of the wall that was placed on the squares hangs in mid air. I also am including a series of screenshots where I moved to an empty lot and made a diagonal wall, and then showed how doors and windows place normally, but shelves only lock to in between squares, then I placed one with MOO and dropped to wall to show how it remains visible. (I'll put the other screen shots in a second post)
This problem remained after repairing my game.
My issue is that I have a bunch of single square diagonal walls in my lot that I made because I liked the look of cutting off corners, and previous to this update, I could decorate them without issue, and now I cannot decorate them how I used to without the stuff hanging around when I move to Cut Away mode, which is how I tend to play the game. If this is how stuff works with diagonal walls right now, it's really annoying for all my hallways, lol.