I can move around my world ok, and I can ascend bubble columns. Redstone machines have stopped, I cannot open inventory or chests and mobs have frozen. Exit and save hangs on the save so I have to force quit. Have tried adjusting the simulation distance to all available settings. Save succeeds at 12 chunks but no others, but the other problem remains
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Agree. I went back to a backup from yesterday, working ok so far. I left it running overnight with the world that has now developed a bug so perhaps the upgrade had something to do with it. I think the save is toast but would like to know why.

It happened to me after the recent update too. Good thing you got a backup, my backup isn't showing any signs of the issue so far as well. But I'm still cautious in case it happens again.

Resolving the ticket as a duplicate of MCPE-154278.
Sounds very much like MCPE-154278