Ok so pretty much my rotation blue and red arrows lock to me and not the block, i.e. when I move, the arrows do too.
Your rotation type is set to 'Camera'. You'll want to change it to 'World'. You can change it in the 'Tool Settings' menu (go down to the Rotation section and make sure 'Type' is set to 'World').
I believe you can also change the type by selecting an item and pulling the right trigger to bring up the rotation circles. Then tap up on the d pad to cycle through the different types.
It's a bug in the update. I just restart my game when it happens. I have a map that takes 5 min to generate lighting now, after the update and it is only at 50%.
I helped OP fix it. For some reason flipping it to world using the trigger wasn't working for him, and he had to use the tool settings as @a Chunk suggested.