The Software Update Cycle was scheduled with no reboot to run on the Client from the SMP Console > Default Software Update Plug-in (DSUP) Policy.
The Client ran the Software Update Cycle and the Software Update is listed in the InstallLog.csv file. The admin manually rebooted the Client at a later time and the Agent GUI shows status as 'Installed by User' on Software Updates Tab.
The targeted .dll being targeted by the Software Update was not modified until the reboot took place. The reboot executed the Windows Update Configuration and that process on the Operating System is when the targeted .dll was modified.
This is working as designed, for Patch Management's event was ended when the Software Update Cycle stopped per the settings on the DSUP. The reboot needs to be included in the Software Update Cycle event if the status needs to show installed by Patch Management.
Note: The InstallLog.csv file displays the update install date/time as it is initiated by Patch Management, and once the Client is rebooted, the Patch Inventories will return to the SMP Server, the Patch Target will update and Software Update Policies will no longer target the client, so the status will be cleared on the Agent GUI proceding this series of processes and the Client runs the Update Configuration on schedule.