It's not known why this is happening, but clearly it's affected enough Xbox users to generate a fuss:
To Team Xbox's credit, this is the kind of thing they'll normally fix pretty quickly, so hopefully we'll have a proper resolution very soon. In the meantime, some are reporting that by using a wired connection, the problem goes away.
We can't say we've come across this here at GameParadise, but then again we haven't had any need to factory reset our consoles recently! If you were thinking of doing it though, it might be worth waiting a bit longer until this is fixed...