I can also confirm that automatic installation of this update via Windows Update on Windows Server 2016 w/ Exchange Server CU23 Jun23SU (all de-de locale) fails and leaves the whole installation in an inoperational state.
MSI (c) (90:F4) [23:30:34:135]: Product: Microsoft Exchange Server - Update 'Security Update for Exchange Server 2016 Cumulative Update 23 (KB5029388) 15.1.2507.31' could not be installed. Error code 1603. Additional information is available in the log file E:\Exchange\V15\Logging\Update\msi\ExchangeUpdate_2023-08-08-205622.log.
MSI (c) (90:F4) [23:30:34:136]: Windows Installer installed an update. Product Name: Microsoft Exchange Server. Product Version: 15.1.2507.6. Product Language: 1033. Manufacturer: Microsoft Corporation. Update Name: Security Update for Exchange Server 2016 Cumulative Update 23 (KB5029388) 15.1.2507.31. Installation success or error status: 1603.