Hi Ajit Duhoon,
It occurs in the offline phrase of the WU, generally a driver hangs which stops the installation, finding that driver can be a time-consuming process.
It is generally associated with driver issues that can prevent the update from installing correctly. While it's true that this error can sometimes be resolved with a simple reboot, there are other steps that can be taken to address the problem more thoroughly. For instance, running the Windows Update Troubleshooter, check for a bios update or checking for driver updates manually can often resolve the issue.
Additionally, ensuring that there is sufficient disk space and that no external devices are connected can help prevent this error. If these steps do not resolve the problem, consulting the Panther logs or using the Setupdiag tool can provide more detailed information on the cause of the error.
It's important to remember that while the error originates from the system's interaction with Microsoft's servers, because when you hit the update key your hardware and software is uploaded to Windows servers and then it goes against a criteria so your computer only receives what is needed for your hardware / software combination , this process doesn’t always go to plan so results in the dreaded GSOD or BSOD for that matter, the resolution can / often lies within the user's system configuration and environment.
Sorry I can’t offer a fix but knowing how the process works gives you insight when updating your computer.
I myself have had this error with Insider Installs and if I can’t resolve it I run a .ISO from within Windows which sorts it.