As an IT consultant with over 30 years' experience, I am more than capable of and confident to resize a couple of partitions, especially as tools like Minitool's Partition Wizard make it so simple these days. Unfortunately however, this suggested fix categorically does NOT work!
For starters, Microsoft state that this particular update is for machines with an OEM style recovery partition (the kind of setup Laptop manufacturers like HP and Dell use to give their customers a way to factory-reset with their bespoke modified Windows builds). My PC was NEVER set up this way, it was a clean install from a Microsoft ISO so it shouldn't even be trying to install this update.
Even after creating a suitable partition, copying the appropriate .wim file and configuring it as per Microsoft's instructions, this update STILL fails!
I have to agree with Chien here, this CANNOT be fixed manually, even by an experienced IT professional. This is probably because Microsoft isn't being entirely transparent about what's causing the problem, if they even know. If they knew what the problem was, it wouldn't still be broken a month later, especially since it's a security update in question here.
On the plus side, this is a hugely widespread issue potentially affecting millions of users so it really is in Microsoft's interest to get it fixed asap. Until they do, any vulnerability this failure exposes will also affect the same huge number of users - I'd rather be a vulnerable target in a group of millions than be vulnerable in a much smaller group. Safety in numbers.