An easy (and generally non-destructive) diagnostic step that users often take when trying to fix a Firefox issue is to uninstall and/or reinstall. Because we don't clear out our install file, this has almost no effect right now as anything broken in there stays broken. On support one of the first troubleshooting steps we take with an unknown problem is to ask users to delete the installation folder and re-install. While this doesn't always work, it can help with some of the most confusing questions (caused by random file corruption or third-party programs). Unfortunately, it's really hard to do for most users. We'd like the installer to clobber any existing files in the installation folder before proceeding to make it easier to fix problems like this.
To avoid causing problems for users who use a custom install and use C:\ as their install folder, we should probably limit this action to users with default installs.
I completely agree that from my experience this is pretty often cause of issues. May I suggest an alternative? Poll all files in the Firefox folder, and report in about:support any file that doesn't match an expected hash. Then support would know which extraneous/corrupt files/libraries are present without doing a silent folder delete that could cause dataloss.
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