A patch installation task that is configured inside a Managed Software Delivery policy will fail when executed on the client:
When assigning the task directly on client machine it will execute properly with no failure.
ITMS 8.x
Patch Management 8.x
This is working as expected and is not a supported use case.
For a Windows Software Update Installation Task inside a Managed Delivery Policy, the task needs to invoke an API through Task Management on the server side to create/shadow a Software Update Policy that realizes the actual updates installation. The Software Management Framework that Managed Software Delivery policies are built on top and don't have such abilites.
Use Patch Management policies or Patch install tasks as standalone.