I did a full recovery clean re-install, and the problem still exists.
Me too. Carried out the reset recovery procedure (with keeping files option) twice but the update KB4054517 stops at "status: Installing - 99%". If I do a restart, it takes a very long time for the "getting windows ready" message to go away. The update status issue remains each time. So I don't shut my computer down. Now I have the message, again after a very long time, "There were some problems installing updates, ........................ etc., error code 0x800705b4". Retry.
I had the very same experience and fix it with the above procedure.
I suspect something's wrong with the package downloaded automatically from Windows Update, because the one I downloaded manually was just fine.
The thing is you should probably clean the system files to get rid of the previously downloaded files from automatic Windows update, before attempt to install KB4054517 manually.