In an elevated command prompt enter

msiexec /package {B775C26B-EAA8-4A11-ACBF-76E52DF6B805} /uninstall {342DCD5D-5946-453B-97AC-D53B7662EDF5}

This is not "the fix". This is only how to uninstall the patch.

Personally I had to do this then delete and re add my Hotmail accounts.

 I honestly believe this "problem" was created intentionally. MS will stop at nothing in it's attempt to catch up to google in data collection :( 

Source: http://www.neowin.net/forum/topic/1281796-required-windows-live-mail-2012-update-cripples-the-app-for-some-users/

Windows 7 Pro x64 on Z87 intel