I was able to solve my issue with this update continuously failing, I've linked the articles that helped me below.
It was related to WinRE, however resizing didn't appear to be my issue. I guess it was just incorrectly configured on which partition it should use.
When I ran
reagentc /info
it showed that my RE location was harddisk1\Partition5
Following instructions I disabled it with
reagentc /disable
I was unsuccessful in following the resizing instructions tryting to use the same hd and partition that the /info gave
I then decided to just turn it back on with
reagentc /enable
I noticed that the new location was harddisk1\partition4
I then was able to retry the windows update successfully.
Hope this helps someone else.
Same issue here: https://support.microsoft.com/en-us/topic/kb5033560-update-for-windows-recovery-environment-winre-november-30-2023-b77c74c1-e7e0-4988-b1a3-71c00632cd69
Linked article with resizing instructions: https://support.microsoft.com/en-us/topic/kb5028997-instructions-to-manually-resize-your-partition-to-install-the-winre-update-400faa27-9343-461c-ada9-24c8229763bf