How to fix Can't retrieve group information for user IIS APPPOOL\DefaultAppPool

In Windows 10 Visual Studio Community Edition is used. ASP.NET MVC 4 applications are running from it in Debug Mode using IIS Express installed by Visual Studio.

Upgrading to Windows 10 anniversity edition fails with error

0xc1900101 - 0x30018 The installation failed in the FIRST_BOOT phase with an error during SYSPREP operation.

Windows setuperr.log file is below. Last line in log contains

Can't retrieve group information for user IIS APPPOOL\DefaultAppPool.

According to https://social.technet.microsoft.com/Forums/windows/en-US/b8d1f70b-c631-4de9-8dd2-844ef8d0d7c7/how-to-fix-0xc19001010x30018-error-upgrading-to-anniversity-edition?forum=win10itprosetup

is is the reason of failing upgrade. How to fix the issue ? Is is possible to remove or repair Visual Studio IIS APPPOOL\DefaultAppPool account so that Visual Studio continues working.

I havent found any GUI in Visual Studio or in other place for this.

2016-09-27 00:47:32, Error      [0x0803b6] MIG    Can't retrieve group information for user IIS APPPOOL\DefaultAppPool. NetUserGetLocalGroups failed 0x000008AD
2016-09-27 00:47:36, Error                 SP     pSPRemoveUpgradeRegTree: failed to delete reg tree HKLM\SYSTEM\Setup\Upgrade[gle=0x00000005]
2016-09-27 00:47:45, Error      [0x0803b6] MIG    Can't retrieve group information for user IIS APPPOOL\DefaultAppPool. NetUserGetLocalGroups failed 0x000008AD
2016-09-27 00:47:48, Error      [0x080831] MIG    CSIAgent: Invalid xml format: FormatException: "id" attribute is mandatory. void __cdecl Mig::CMXEMigrationXml::LoadSupportedComponent(class UnBCL::XmlNode *,int,class Mig::CMXEMigrationXml *,class Mig::CMXEXmlComponent *)
2016-09-27 00:48:04, Error                 CSI    00000001 (F) 80220008 [Error,Facility=FACILITY_STATE_MANAGEMENT,Code=8] #89591# from CWcmScalarInstanceCore::GetCurrentValue(options = 393216 (0x00060000), status = [6]"(null)", value = { type: 40972 (0x0000a00c), bytes ( 12 (0x0000000c) ): 65006e002d00550053000000 })
[gle=0x80004005]
2016-09-27 00:48:06, Error                 CSI    00000002 (F) 80220008 [Error,Facility=FACILITY_STATE_MANAGEMENT,Code=8] #161004# from CWcmScalarInstanceCore::GetCurrentValue(options = 393216 (0x00060000), status = [6]"(null)", value = { type: 40972 (0x0000a00c), bytes ( 12 (0x0000000c) ): 65006e002d00550053000000 })
[gle=0x80004005]
2016-09-27 00:48:29, Error      [0x080389] MIG    Failure while calling IDiscovery->Gather for Plugin={ServerPath="Microsoft-Windows-AppX-Deployment-Server\AppxUpgradeMigrationPlugin.dll", CLSID={AE27C1A6-25F2-45FD-9A28-081B81F29E0A}, ThreadingModel=Apartment}. Error: 0x80010105
2016-09-27 00:48:29, Error                 SP     Error READ, 0x80010105 while gathering/applying object: pre-scan, Action,CMXEPlugin,C:\$WINDOWS.~BT\Sources\ReplacementManifests,Microsoft-Windows-AppX-Deployment-Server\AppxUpgradeMigrationPlugin.dll,{AE27C1A6-25F2-45FD-9A28-081B81F29E0A},Apartment. Will return 2[gle=0x000000cb]
2016-09-27 00:48:33, Error                 CSI    00000003 (F) 80220008 [Error,Facility=FACILITY_STATE_MANAGEMENT,Code=8] #247735# from CWcmScalarInstanceCore::GetCurrentValue(options = 393216 (0x00060000), status = [6]"(null)", value = { type: 40972 (0x0000a00c), bytes ( 12 (0x0000000c) ): 65006e002d00550053000000 })
[gle=0x80004005]
2016-09-27 00:48:41, Error      [0x0803b6] MIG    Can't retrieve group information for user IIS APPPOOL\DefaultAppPool. NetUserGetLocalGroups failed 0x000008AD
2016-09-27 00:48:46, Error      [0x080831] MIG    CSIAgent: Invalid xml format: FormatException: Component with display name: Plugin/{C939EC0F-2F56-4CE8-AF56-2336596A5FA7} already loaded __cdecl Mig::CMXEMigrationXml::CMXEMigrationXml(class Mig::CPlatform *,class UnBCL::String *,class UnBCL::XmlDocument *,class UnBCL::String *,class UnBCL::String *)
2016-09-27 00:51:00, Error      [0x0808fe] MIG    Plugin {526D451C-721A-4b97-AD34-DCE5D8CD22C5}: [shmig] Failed to get preferred homegroup with hr=0x80070490
2016-09-27 00:52:03, Error                        CSetupAutomation::Resurrect: File not found: C:\$WINDOWS.~BT\Sources\Panther\automation.dat[gle=0x00000002]
2016-09-27 00:52:03, Error                 SP     CSetupPlatform::ResurrectAutomation: Failed to resurrect automation: 0x80070002[gle=0x00000002]
2016-09-27 00:52:03, Error      [0x0803b6] MIG    Can't retrieve group information for user IIS APPPOOL\DefaultAppPool. NetUserGetLocalGroups failed 0x000008AD

Update

After deleting IIS user profile update still fails with same error. Now seytuperr.log does not contain user-related error. How to find reason of update failure?

2016-09-28 19:21:32, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:32:04, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:32:04, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:32:04, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:32:04, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:32:04, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:32:20, Error                 MOUPG  CDlpResponseImpl<class CDlpErrorImpl<class CDlpObjectInternalImpl<class CUnknownImpl<class IDlpResponse> > > >::CheckUserCancelled(1586): Result = 0x800704D3
2016-09-28 19:32:20, Error                 MOUPG  CDlpResponseImpl<class CDlpErrorImpl<class CDlpObjectInternalImpl<class CUnknownImpl<class IDlpResponse> > > >::Execute(1751): Result = 0x800704D3
2016-09-28 19:32:20, Error                 MOUPG  CDlpActionImpl<class CDlpErrorImpl<class CDlpObjectInternalImpl<class CUnknownImpl<class IMoSetupDlpAction> > > >::ExecuteResponse(1184): Result = 0x800704D3
2016-09-28 19:32:20, Error                 MOUPG  CDlpActionSummary::ExecuteRoutine(202): Result = 0x800704D3
2016-09-28 19:32:20, Error                 MOUPG  CDlpActionImpl<class CDlpErrorImpl<class CDlpObjectInternalImpl<class CUnknownImpl<class IMoSetupDlpAction> > > >::Execute(441): Result = 0x800704D3
2016-09-28 19:34:05, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:34:05, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:34:05, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:34:05, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:34:05, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:37:33, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:37:33, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:37:33, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:43:42, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:43:42, Error                        [SetupHost.exe] IOCTL_STORAGE_QUERY_PROPERTY failed: 0x1
2016-09-28 19:43:49, Error                 SP     pSPRemoveUpgradeRegTree: failed to delete reg tree HKLM\SYSTEM\Setup\Upgrade[gle=0x00000005]
2016-09-28 19:44:01, Error      [0x080831] MIG    CSIAgent: Invalid xml format: FormatException: "id" attribute is mandatory. void __cdecl Mig::CMXEMigrationXml::LoadSupportedComponent(class UnBCL::XmlNode *,int,class Mig::CMXEMigrationXml *,class Mig::CMXEXmlComponent *)
2016-09-28 19:44:12, Error                 CSI    00000001 (F) 80220008 [Error,Facility=FACILITY_STATE_MANAGEMENT,Code=8] #18323# from CWcmScalarInstanceCore::GetCurrentValue(options = 393216 (0x00060000), status = [6]"(null)", value = { type: 40972 (0x0000a00c), bytes ( 12 (0x0000000c) ): 650074002d00450045000000 })
[gle=0x80004005]
2016-09-28 19:44:42, Error      [0x080389] MIG    Failure while calling IDiscovery->Gather for Plugin={ServerPath="Microsoft-Windows-AppX-Deployment-Server\AppxUpgradeMigrationPlugin.dll", CLSID={AE27C1A6-25F2-45FD-9A28-081B81F29E0A}, ThreadingModel=Apartment}. Error: 0x80010105
2016-09-28 19:44:43, Error                 SP     Error READ, 0x80010105 while gathering/applying object: pre-scan, Action,CMXEPlugin,C:\$WINDOWS.~BT\Sources\ReplacementManifests,Microsoft-Windows-AppX-Deployment-Server\AppxUpgradeMigrationPlugin.dll,{AE27C1A6-25F2-45FD-9A28-081B81F29E0A},Apartment. Will return 2[gle=0x000000cb]
2016-09-28 19:44:47, Error                 CSI    00000002 (F) 80220008 [Error,Facility=FACILITY_STATE_MANAGEMENT,Code=8] #105054# from CWcmScalarInstanceCore::GetCurrentValue(options = 393216 (0x00060000), status = [6]"(null)", value = { type: 40972 (0x0000a00c), bytes ( 12 (0x0000000c) ): 650074002d00450045000000 })
[gle=0x80004005]
2016-09-28 19:45:00, Error      [0x080831] MIG    CSIAgent: Invalid xml format: FormatException: Component with display name: Plugin/{C939EC0F-2F56-4CE8-AF56-2336596A5FA7} already loaded __cdecl Mig::CMXEMigrationXml::CMXEMigrationXml(class Mig::CPlatform *,class UnBCL::String *,class UnBCL::XmlDocument *,class UnBCL::String *,class UnBCL::String *)
2016-09-28 19:47:12, Error      [0x0808fe] MIG    Plugin {526D451C-721A-4b97-AD34-DCE5D8CD22C5}: [shmig] Failed to get preferred homegroup with hr=0x80070490
2016-09-28 19:48:29, Error                        CSetupAutomation::Resurrect: File not found: C:\$WINDOWS.~BT\Sources\Panther\automation.dat[gle=0x00000002]
2016-09-28 19:48:29, Error                 SP     CSetupPlatform::ResurrectAutomation: Failed to resurrect automation: 0x80070002[gle=0x00000002]

I would say this is a case of Not every Windows error is a problem,

IIS APPPOOL\DefaultAppPool is a virtual user, it doesn't really exist in the system, calling the Win32 API function NetUserGetLocalGroups with this username as a parameter it will always fail, because it can not find that user, because it is a virtual one. So while the Windows update process reports this as an error, I'm pretty sure this is not the problem why your update does not work. Look through the logs again to find the culprit.

BTW, as far as I know, the IIS APPPOOL\* users are not used in IIS Express which comes with Visual Studio. They are only used by the proper IIS which at some point you must have installed on your system. I don't think deleting the Application Pool DefaultAppPool in IIS will remove all references to this virtual user from the system.