MicrosoftBala_Delli can you share more details, on how does the client populate the "UpdateServiceUrlAlternate" registry entry? What I'm asking is, is there a specific setting in the console, that needs to be set in a particular way, or it just does it to "http://localhost:8005", no matter what you set?
Sorry, I wasn't clear, MECM was upgraded to 2303 and the clients were also upgraded, so the client version is 5.00.9106.1022. Today I've compared results from my daily laptop (not affected by the issue) with a colleagues laptops (has the 0x80070002 error in DeltaDownload.log), both are running Windows 11 22H2, both have MECM client version 5.00.9106.1022 and both clients in MECM report as healthy, the RSOP were almost identical, except for this one setting "Windows Components/Windows Update/Manage updates offered from Windows Server Update Service/Specify intranet Microsoft update service location/Set the alternate download server:" is populated on my device with "http://localhost:8005" and it's not populated on his devices. I have removed the registry entry on my device and after a policy update the setting came back (as expected) and on his device a policy update had no influence on this setting. We have re-installed his MECM client from the console and it cured the problem, then we also removed the registry entry on his device and re-applied the policy to make sure it comes back and it did. For the moment this looks to be a bug as he has the same MECM client version as he had before re-installing the client.
