Given the terrible memories we have of the Blue Screen of Death, this may trigger more post-traumatic stress than laughs, but Baconit developer Quinn Damerell baked in the joke anyway. It will randomly show a "fatal disk corruption error". It looks pretty realistic, but we don't want anyone to worry. The app will not really be attempting a "factory restore" on your device. It's just a joke and backing out of the app will get you back to normal.
The fake error should only be showing up over the next day or so, and then it will disappear after that. If you want to give Baconit a try, it is a pretty solid Reddit reader for Windows Phone 8, so you can grab it from the Windows Phone Store for free.