If you're already using iOS 8's iCloud Drive feature, you might want to avoid your iPhone's "Reset" menu. MacRumors reports that a newly discovered bug causes iCloud Drive documents to be permanently erased from the cloud whenever a a user picks "Reset All Settings." Ordinarily this option would simply do what it says; the iPhone's settings and preferences are immediately reset to their original factory defaults. No media (music, photos, etc.) or documents are supposed to be erased or otherwise affected when performing this action — that should only happen if you choose "Erase All Content and Settings" and wipe your phone entirely.
But something's clearly not right, with MacRumors reporting that documents stored in iCloud Drive are disappearing from Apple's iWork apps upon reset. They're also vanishing from OS X Yosemite, which will bring iCloud Drive to Mac users later this fall. Right now, it's iOS users along with Yosemite developers and beta testers reporting the problem. iCloud Drive is also available on Windows, but it's unclear if the issue has popped up there. It's also not yet obvious how widespread the bug is or whether it affects everyone that has transitioned to iCloud Drive.
In our own testing, using "Reset All Settings" deleted all iWork documents stored in iCloud Drive on the iPhone and on iCloud.com. After allowing time for syncing to a Mac running OS X Yosemite, all of the documents disappeared from that machine as well. Preview and TextEdit documents, which cannot be accessed on the iPhone, remained untouched on the Mac.
There's no easy way of recovering documents deleted from iCloud. Apple added a "recently deleted" folder to Photos in iOS 8, but hasn't yet implemented a similar option for all of iCloud. MacRumors notes the issue "may be limited to Apple's own iWork apps like Pages, Keynote, and Numbers" and iCloud Drive files from other third-party apps could be safe from the bug. But for now, the best option is avoiding "Reset All Settings" entirely until a fix is in place. We've reached out to Apple for clarification on just what's going on.