Icon display in the App Store app is back to normal except for apps update-published on Oct 8 (some), Oct 9 (all), Oct 10 (all).
Apps do get updated when the "Update" button is pressed.
On a separate but possibly related AppStore weirdness issue: sometimes during the updating of the app, the update process would stall and hang for a long time. Press and hold the offending icon to activate the move/delete icon-dancing mode. Touch the x-cross to delete the app. But the usual system pop-up dialog box never shows up. Cannot pause or stop the update either. Only thing that works is to go into Settings --> General --> Storage & iCloud Usage --> (Storage) Manage Storage, and then hunt through the app listing to delete the offending app.