Guest OS Customization doesn't take effect.
Guest OS customization uses Windows Sysprep to apply the configuration. A proceeding Windows Update will cause some Sysprep pre-validing errors and fail to run.
To resolve the issue, please follow the below mentioned steps:
Option 1:
From Settings -> Windows Update, click “Check for updates”, install all available Windows updates till the OS is up to date.
Option 2:
From Settings -> Windows Update, click “Pause updates” and select “Pause for 1 week”.
If there is error message "Audit mode cannot be turned on if reserved storage is in use" in %WINDIR%\System32\Sysprep\Panther\setupact.log file, apply below 2 configurations:
a. Open "Registry Editor", navigate to "HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\ReserveManager" and change "ActiveScenario" to value 0.
b. Run command "DISM.exe /Online /Set-ReservedStorageState /State:Disabled" to disable Reserved Storage.