Based on a small but steady flow of reports, it appears that Google’s Android 4.4 update for the Nexus 4 is leading to issues around the home screen.
Specifically, for some users the virtual home button, which is used to (obviously) return to the home screen from an app, does not have any effect when pressed; for others, the Quick Settings menu is completely blank when tapped. Others are experiencing force closes when opening the dialler, along with random app instability.
The issue is specific to the Nexus 4, and is relegated to those who updated to build KRT16S from the previous Jelly Bean version, or who sideloaded the factory image without previously wiping data. This leads us to believe that the issue isn’t necessarily with the update itself but with negative interactions between some system files and existing data on some users’ devices. Wiping the device to factory settings reportedly fixes the issue every time.
Google has not acknowledged the problem, and it’s unclear whether the issue is widespread enough to issue yet another small bugfix update. At this point, affected users are encouraged to back up any important files and media and restore to factory defaults by entering Settings/Backup & Reset.