I'm having this exact same problem. Upgraded from Windows 7/ArcMap 10.4.1 to Windows 10/ArcMap 10.6.1 and every mxd I open, with all data stored locally on my Town Hall network will eventually randomly lose connection to every single data layer, all stored as shapefiles, file geodb or scanned raster asbuilts with general function failure. Very Frustrating!!!!
Will talk with IT regarding shared policy, but how does one go about easily changing to UNC paths on 20 years of work?