The fix was to manually force the system to install the update.
Verify that Windows Update has downloaded - but not installed - the update. These are two different things. In your File Explorer, enable Hidden items under View and go to
Check if either
windows10.0-kb3122947-x64.cab are present (Depending on which Windows type your have)
Right-click on your Start button and choose
Command Prompt (Admin). Paste and execute the following command corresponding to your Windows type
Windows x86 (32-bit)
dism /online /add-package /packagepath:C:\Windows\SoftwareDistribution\Download\b0a5da1b24245bc4237166e09bae92da\windows10.0-kb3122947-x86.cab
Windows x64 (64-bit)
dism /online /add-package /packagepath:C:\Windows\SoftwareDistribution\Download\c4a1b8896ce9fbfea96c1ee6890d52a5\windows10.0-kb3122947-x64.cab
If you see the message
The operation completed successfully. restart your system and you're done.
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