I've managed to recover a device without rebuilding it. Download the Latest LCU from https://www.catalog.update.microsoft.com/Search.aspx?q=KB5121003 and put it on a USB drive it's about 5gb
- Boot into WinRE cmd prompt.
- Load the Registry offline
reg load HKLM\OFFSOFT C:\Windows\System32\Config\SOFTWARE - Backup key reg Key
"HKLM\OFFSOFT\Microsoft\Windows\CurrentVersion\Component Based Servicing" C:\CBS-backup.reg - Remove Exclusive Flag (causing cbs errors)
reg delete "HKLM\OFFSOFT\Microsoft\Windows\CurrentVersion\Component Based Servicing\SessionsPending" /v Exclusive /f - Unload Registry
reg unload HKLM\OFFSOFT - Make a scratch location
mkdir C:\Scratch - Apply the update from your usb drive
DISM /Image:C:\ /Add-Package /PackagePath:"E:\windows11.0-kb5121003-x64_dc58f03fef04b4c611e0db0ab3fadfb301194113.msu" /ScratchDir:C:\DISMScratch /LogPath:C:\LCU-DISM.log
I found that the hotpatch fails to apply properly with Threatlocker if you didn't add the Hotpatch policies they have recently updated. What happens is windows reports the update as successfull even if some of the dlls were blocked by Threatlocker then when the machine next reboots it runs into this error. We tried everything and were rebuilding devices as the only alternative but the above worked for me after days and days of troubleshooting and managing to get a device that was no longer needed by a client.
One thing we have not tried yet is removing the exclusive flag then uninstalling the hotpatch from DISM - will be doing that on the next affected device and report back here however applying the MSU definitely gets the machine back up and running without rebuilding