Windows Update Failure Server 2016 SCCM + PXE Point

The Setup:

• Server 2016 Hyper-V guest
• SCCM 
• PXE Distribution point

The Error:

Anytime windows update attempted to install any update later than KB4487026 it would fail at 72% with the following error in the CSI log:

2019-04-09 23:21:59, Info                  CSI    000002b2 Begin executing advanced installer phase 31 index 0 (sequence 0)
    Old component: [l:0]''
    New component: [l:0]''
    Install mode: delta
    Smart installer: TRUE
    Installer ID: {a111f280-5923-47c0-9a68-d0bafb577901}
    Installer name: 'Network Drivers'
2019-04-09 23:21:59, Info                  CSI    000002b3 Begin NetSetup servicing operation
2019-04-09 23:21:59, Info                  CSI    000002b4 Begin loading the binding engine
2019-04-09 23:22:00, Info                  CBS    Progress: UI message updated. Operation type: Update. Stage: 1 out of 1. Percent progress: 72.
2019-04-09 23:26:59, Info                  CSI    000002b5 Exception: AI base address @0x7ffbc8eb0000
2019-04-09 23:26:59, Info                  CSI    000002b6 Exception: API address of NetSetupCommit @0x7ffbc8e81390
2019-04-09 23:26:59, Info                  CSI    000002b7 Exception: Frame @0x7ffbe8bd1a39
2019-04-09 23:26:59, Info                  CSI    000002b8 Exception: Frame @0x7ffbe5264078
2019-04-09 23:26:59, Info                  CSI    000002b9 Exception: Frame @0x7ffbe69fbab2
2019-04-09 23:26:59, Info                  CSI    000002ba Exception: Frame @0x7ffbe8c39bc3
2019-04-09 23:26:59, Info                  CSI    000002bb Exception: Frame @0x7ffbc8eb63bc
2019-04-09 23:26:59, Info                  CSI    000002bc Exception: Frame @0x7ffbc8eb629b
2019-04-09 23:26:59, Info                  CSI    000002bd Exception: Frame @0x7ffbc8eb6308
2019-04-09 23:26:59, Info                  CSI    000002be Exception: Frame @0x7ffbc8eb5152
2019-04-09 23:26:59, Info                  CSI    000002bf Exception: Frame @0x7ffbdce8f31e
2019-04-09 23:26:59, Info                  CSI    000002c0 Exception: Frame @0x7ffbdce8f0a1
2019-04-09 23:26:59, Info                  CSI    000002c1 Exception: Frame @0x7ffbdce76751
2019-04-09 23:26:59, Info                  CSI    000002c2 Exception: Frame @0x7ffbdce9be1d
2019-04-09 23:26:59, Info                  CSI    000002c3 Exception: Frame @0x7ffbddcc73bd
2019-04-09 23:26:59, Info                  CSI    000002c4 Exception: Frame @0x7ff7e7bf3c88
2019-04-09 23:26:59, Info                  CSI    000002c5 Exception: Frame @0x7ffbe6b08263
2019-04-09 23:26:59, Info                  CSI    000002c6 Exception: Frame @0x7ffbe6b6bc0d
2019-04-09 23:26:59, Info                  CSI    000002c7 Exception: API address of NetSetupCommit @0x7ffbc8e81390
2019-04-09 23:26:59, Info                  CSI    000002c8 Exception: Frame @0x7ffbc8ebcb0f
2019-04-09 23:26:59, Info                  CSI    000002c9 Exception: Frame @0x7ffbc8ebbf44
2019-04-09 23:26:59, Info                  CSI    000002ca Exception: Frame @0x7ffbc8eb52cb
2019-04-09 23:26:59, Info                  CSI    000002cb Exception: Frame @0x7ffbc8eb63bc
2019-04-09 23:26:59, Info                  CSI    000002cc Exception: Frame @0x7ffbc8eb629b
2019-04-09 23:26:59, Info                  CSI    000002cd Exception: Frame @0x7ffbc8eb6308
2019-04-09 23:26:59, Info                  CSI    000002ce Exception: Frame @0x7ffbc8eb5152
2019-04-09 23:26:59, Info                  CSI    000002cf Exception: Frame @0x7ffbdce8f31e
2019-04-09 23:26:59, Info                  CSI    000002d0 Exception: Frame @0x7ffbdce8f0a1
2019-04-09 23:26:59, Info                  CSI    000002d1 Exception: Frame @0x7ffbdce76751
2019-04-09 23:26:59, Info                  CSI    000002d2 Exception: Frame @0x7ffbdce9be1d
2019-04-09 23:26:59, Info                  CSI    000002d3 Exception: Frame @0x7ffbddcc73bd
2019-04-09 23:26:59, Info                  CSI    000002d4 Exception: Frame @0x7ff7e7bf3c88
2019-04-09 23:26:59, Info                  CSI    000002d5 Exception: Frame @0x7ffbe6b08263
2019-04-09 23:26:59, Info                  CSI    000002d6 Exception: Frame @0x7ffbe6b6bc0d
2019-04-09 23:26:59, Info                  CSI    000002d7 Exception: Frame @0x7ffbe6a968f9
2019-04-09 23:26:59, Info                  CSI    000002d8@2019/4/9:13:26:59.533 CSI Advanced installer perf trace:
CSIPERF:AIDONE;{a111f280-5923-47c0-9a68-d0bafb577901};(null);300181877us
2019-04-09 23:26:59, Info                  CSI    000002d9 End executing advanced installer (sequence 0)
    Completion status: 800106d9 [Error,Facility=(0001),Code=1753 (0x06d9)]

2019-04-09 23:26:59, Info                  CSI    000002da Performing 1 operations as follows:
  (0)  LockComponentPath: flags: 0 comp: {l:16 b:68f708e9d7eed401de0200008007ac07} pathid: {l:16 b:68f708e9d7eed401df0200008007ac07} path: [l:115]'\SystemRoot\WinSxS\x86_microsoft.windows.s..ation.badcomponents_31bf3856ad364e35_10.0.14393.0_none_09e78f632173f4c5' pid: 780 starttime: 131992895724459066
2019-04-09 23:26:59, Error      [0x01805b] CSI    000002db (F) Failed execution of queue item Installer: Network Drivers ({a111f280-5923-47c0-9a68-d0bafb577901}) with HRESULT 800106d9 [Error,Facility=(0001),Code=1753 (0x06d9)].  Failure will not be ignored: A rollback will be initiated after all the operations in the installer queue are completed; installer is reliable[gle=0x80004005]

The temporary solution:

Remove the PXE distribution point from SCCM. Allow SCCM to remove WDS wait a few minutes reboot and try to update again.