Hi all,
I can confirm that this fault is related to Hyper-V. Had this feature installed and removed it again due to using VMware instead. So this KB was not able to get installed as noted above.
Now re-installed this feature and was now able to apply the patch.
To continue working with VMware its required to de-install the Hyper-V feature again.
I'll keep this work around in my mind for the future, crossing my fingers thats not happen again.
Maybe Microsoft is providing a reason for this issue to prevent this for the future.