Before updating try this:
Turn off all languages other than your native one in
Control Panel - > Programs & Features -> (Left pane) Turn Windows features on or off

Check what Settings says...

Yeah, I think it's a throwback to Win7 days. I tried installing Win7 on a VHD and it threw back the same msg "Can't instlall on a VHD"

Every update since 9926 has failed (I think I was running VMs...