In rare cases, you may experience a character select screen that looks like this:

To fix this, do the following:

  1. Create a new character in the THIRD (bottom) slot.
  2. Start a game and play in that world for a minute or two.
  3. Save and exit, close the game, and reload it.
  4. Go back to your character select screen, and everything should return to normal!

This is a known issue that we plan on having fixed in a future update.  Thank you to Cole_W in this thread at the Terraria Community Forums for their help in coming up with this workaround!