Settings disappeared - arch linux

How did you confirm that? In GUI, About → System info shows UserName, or use ps -lp with its PID.
You must have edited /usr/lib/systemd/system/duplicati.service once to make it run as root.
I want to be sure your update didn’t restore settings as in Installing Duplicati on Linux (Arch / Manjaro).

You can see the path of the database Duplicati uses by taking the child pid and doing lsof -p <pid>

mono-sgen 31069 root    5u      REG                8,1    57344  531338 /root/.config/Duplicati/Duplicati-server.sqlite
mono-sgen 31069 root    6wW     REG                8,1        6  531562 /root/.config/Duplicati/control_dir_v2/lock_v2

is from my system. Duplicati runs as root, so it uses the config (and lock file) in root’s home directory.
The theory everyone is chasing is that your new Duplicati is somehow getting a new configuration file.
Searching for the file is good, but you can also look directly to see what file your “empty” Duplicati has.