In what is the oddest and most unexplainable workaround to a problem, I found a solution that doesn't require a factory reset, in a post on reddit, which cited a post on xda-developers. It worked like a charm for me, no idea why. Here's what to do -- Nova Launcher workaround to pixel home/app/notifications issue:
- Install Nova launcher. The google play store won't be working for you if you have the above bug, so open chrome, search for Nova Launcher APK, download it, give your system permission to download and install from outside sources if it doesn't already have that permission (you'll get a pop-up if that's the case, just give permissions if that happens)
- Install Nova launcher.
- It's likely that you are stuck in Chrome at this point, since your home button doesn't work, and the back button does not exit out of chrome. I had to power off and re-start to get to the next step
- Opened Nova from app drawer, went through the initialization process
- hold on an empty part of the screen, find the Activities widget, drag it to an empty place on screen
- Scroll down to setup wizard, hold to SetupWizardUpgradeActivity, click and go through the activity
It's fixed. I didn't want to use the Nova launcher so I switched back to the pixel launcher, and the problem has stayed fixed. My guess here is, the problem is caused by pixel launcher somehow, and you have to slap the pixel launcher back into shape by downloading Nova launcher and threatening to use it