Libraries rely on some XML files. The file extension is
.library-ms.
http://www.sevenforums.com/tutorials/173029-libraries-hidden-empty-fix.html
%AppData%\Microsoft\Windows\Libraries\*.library-ms
Or stated another way...
C:\Users\username\AppData\Roaming\Microsoft\Windows\Libraries\
Documents.library-ms \
Music.library-ms \___ The four libraries you see in explorer...
Pictures.library-ms /
Videos.library-ms /
So what you'd expect, is four files located in that folder.
You should be able to open a .library-ms control file
with Wordpad, as it's just XML. While normally, an XML
opens in Internet Explorer (and displays as a text file),
it's just as easy to open one in Wordpad.
Have a look at the file, and see if the strange things
you see, are related to any lines of text in the
control file.
Presumably, what "Restore Default Libraries" does here,
is put those four files back. But probably empty, so
anything added to the libraries is likely no longer
recorded. (The source folders you added to the library,
should not be affected.) If you get desperate and can't
otherwise fix the problem, you could try this fix. But
then, you'll need to "build" your library again. That's why,
if I was experimenting with it, I'd keep backup copies of
the (screwed up) .library-ms files.
http://www.sevenforums.com/tutorials/581-libraries-restore-default.html
If you have trouble getting to those files, rather than
messing around with the attributes or permissions, you
can use a Linux LiveCD and a text editor there to examine
the files.
Paul