From looking at that image, and reading the comments below, I think it's possible that the problem is that you didn't complete all four quests that were available last week (1, 3, 4, and 6), as well as 10. Alternatively, as you surmise, it's also possible that your completing the [spoiler] quest with your friend prior to finishing verse 10 is the problem. Like you, I have seen multiple posts that seem to confirm that may be the problem too. Did your friend also only complete 4 of the quests before receiving the Another Verse quest line? The answer to that question may help narrow the focus to what the problem is. Regardless, I am very sympathetic to you and everyone else who is reporting this bug/issue. I note that this is not the only comment thread in which people have complained about this problem.

Well this cannot seem to be explained that I received the SMG and it has disappeared from my inventory. It's as if I never did the verse.

Did you infuse any of the required materials into the SMG before it disappeared at the re-set, and/or did you finish the whole Lost Verse that gives you the SMG? I started verse 6 (the SMG) before the re-set and infused it with some, but not all the required materials. After re-set, I was able to finish it, which prompted me to receive Lost Verse 10 from Brother Vance (which I am still working on). I am wondering if the system deletes the Lost Verse at the re-set if there has been no progression to finishing it other than accepting the Lost Verse from Brother Vance. That might go a long way to explaining why people who had Lost Verse 6 like you are seeing it disappear, and then because it has disappeared are unable to further progress? Again, I don't know, and if you completed the SMG quest, then my guess definitely is wrong. Regardless, I am very sympathetic to so many people like you that seem to be mysteriously blocked from further progression this week, and want to see the problem resolved for everyone.

I infused all the materials.... forged the gun.. even used it in a public event and then moved onto my regular activities. After I did verse 10 and got the sword, I was unaware of the Saint-14 quest and just went about my business. I only noticed that I didn't receive the quest, and my gun was missing after watching a stream.

OK, no question about it. That really sounds like a bug, and Bungie's response above does not seem logical if your weapon was outright deleted.

Thanks for posting the picture because I am in the same boat. Apparently it is our fault... hmm. Sorry Bungie... but this shit is broke.