How to reproduce: 1. Go to settings, customize your short cuts (say, the right soft button) so that it points to an application you've downloaded (in my case, it was MoJab, my Jabber client). 2. Go to the Extras menu, create a new directory, and move the application from step one into the newly created directory. 3. Reboot the phone.
On a Series 60 phone, shortcuts seem to get changed to something arbitrary if the target is no longer available (if it has been removed, upgraded or something similar). However, on Series 40, the phone doesn't know how to respond when it starts up and the target is missing. The right soft button was non-functional, missing a label. Even worse than that, the menu option itself was non-responsive. A few other, related issues with the home screen were noticeable but having the menu functionality completely absent makes the phone significantly less useful, and prevents the phone from being able to perform a factory reset. Moreover, despite having several means of updating the device, there's no publicly available way of flashing the device.