I have the same problem, but when I try to run the updater from the USB drive it gives me this error message:
"Sorry, we're having trouble determining if your PC can run Windows 10."
So far googling hasn't led me to any useful answers. There was some discussion about not having enough room in the System Reserve Partition. Disk Manager screenshot included below; I'm assuming that 100 MB slot is it, even though it's not explicitly named as such (see first screenshot in this article, where it's explicitly called "System Reserve").
Would it help if I tried to resize that partition to 500MB (or more, there's plenty of space on C: so I may just throw an entire GB at it)?
Also of note: I had some issues installing Windows on this machine, because Disk 3 (the system drive) is an M2 NVMe drive. So when I first installed, it put the 100-MB partition on one of the other traditional SATA HDDs. What I learned is that this is a bug (feature?) of the windows installer nowadays, at least with NVMe drives, and that if I reinstall I should disconnect all other drives to force it to put the partition there.
But instead of reinstalling from scratch, I manually went in and moved that partition back to disk 3 to keep it all on one drive. I'm wondering if that's part of (or related to) the errors with windows update? This machine was built from scratch the during first week of March, so I don't have a long history of updates to compare to (though not all updates have failed, just a handful, including the one in the OP).
Any suggestions?
I would make one big partition and let Windows create smaller partitions.
I do not know about NVMe drives.
Good luck..