The most logical reason is the update settings are off that's all,
ThrashZone,
My Windows Update settings are identical to those shown in your post.
Many people have reported that the Windows 10 updates that coerce installation (or nag about installation) appear in their Important list .... while others report that these Windows 10 updates appear in their Optional list. In my case, I have seen these (previously hidden) Windows 10 updates sometimes appear in the Important list, and sometimes appear in the Optional list.
Microsoft has never documented what determines which list these previously hidden updates will appear, and I have not read any user-written post that explains the algorithm used to determine where these previously hidden updates will re-appear.
My point here is that these previously hidden updates can appear in one or the other list.
In whatever list they appear in (after Microsoft has unhidden them), sometimes these previously hidden updates appear checked ... sometimes unchecked. As you know, when they appear checked, then any user that has their Windows Update set to the default value of "Install Updates Automatically" will find Windows 10 being installed.
We can not assume that these (previously hidden) updates will only appear in the Optional list for every user, we cannot assume that these previously hidden updates will only be unchecked, we cannot assume that the end user is computer savvy and has the skills to understand Windows Update settings or Registry settings.
Lets not blame the (computer unsavvy) end user for ending up with Windows 10 on their computer. Microsoft is aware of the large number of computer unsavvy users and is taking advantage of them to meet their Windows 10 installation goals.