Microsoft has now released a script that users can download to fix the failing install loop of Cumulative Update KB3194496 which attempts to bring Windows 10 to build 14393.222. This now rules out a solution being offered through Windows Update or other means.
Microsoft earlier contacted Neowin stating that the issue only affected Windows Insiders that had an earlier build installed that presumably was not available outside of the Production (or non Insiders) ring. The full statement reads:
We are aware of an issue with the recent Windows 10 cumulative update that impacted a small number of customers in the Windows Insider Program that were running a previous build of the OS. We expect to have a solution in place for these customers soon, and will be communicating with Insiders via the Feedback Hub.
Earlier today the company contacted Ed Bott at ZDNet with an updated explanation and link to the Fix-it script:
"We became aware of an issue with the recent Windows 10 cumulative update that impacted a small number of customers in the Windows Insider Program that were running a previous build of the OS. We have created a solution to resolve this issue, which is now live and can be accessed here."
The vague description for the script simply reads "Script to fix Xbox Scheduled Task leftover regkeys that blocks update for insider builds prior to 14388." So it would seem that anyone who had previously been an Insider, regardless if they opted-out later and were already on the Production ring, could have faced this issue and that Microsoft feels that the right way forward is to simply offer the fix through an optional download.
You can grab the script here to be finally rid of the install loop if you haven't already tried the workaround, which appears to be the actual reason the Cumulative update failed to complete the upgrade.