I've not come across this or recall reading about other users here with the problem but it probably is worth looking at some of the update and "bricked" threads here. I don't think it would be safe to format unless you had a backup from the entire contents when it was still in a good state so I'd recommend holding back on formatting unless someone can confirm that it is safe.
Have you contacted Kobo's support? Perhaps a Kobo employee will see your thread here and they can track a support ticket to make sure it gets the right attention.
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