I experienced this, on the same snapd package version and Ubuntu release. I am 
using fish as my shell (it's set in /etc/passwd for my user).
I noticed that the XDG_DATA_DIRS variable had /var/lib/snapd/desktop appended 
with a space instead of a colon.

Editing /usr/share/fish/vendor_conf.d/snapd.fish (data/env/snapd.fish.in
in upstream source, I believe) and changing the 'set' command on line 10
to use '--path' fixed the issue for me.

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https://bugs.launchpad.net/bugs/1960972

Title:
  All snap applications missing from gnome-search after update

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