Microsoft has stated that it needs to be removed.
It is mandatorily checked for a reason.
Issue for Windows 7 SP1 and Windows Server 2008 R2 SP1 We have found that this update is causing additional problem on computers that are running Windows 7 Service Pack 1 (SP1) and Windows Server 2008 R2 SP1. This includes the inability to install future updates.
The KB 3004394 update does not cause any known problems on the other systems for which it is released. We recommend that you install the update on the other systems.
An update is available to remove KB 3004394 from Windows 7 SP1-based and Windows Server 2008 R2 SP1-based computers. For more information, see the following Microsoft Knowledge Base article:
3024777 You cannot install Windows updates after KB 3004394 is installed on Windows 7 and Windows Server 2008 R2
If KB3024777 has properly removed KB3004394 neither one will be shown in the list of installed updates, but will be shown in update history. This is because 3024777 is merely an uninstaller, it doesn't do anything but uninstall the update.
Uninstalling these updates isn't kicking WGA, the update is causing WGA failures in some - but not all - installs. I think it's more OEMs that are impacted.
