Windows 11 25H2 upgrade fails after restart with 0xC1900101-0x20017

Hello,

I am having trouble upgrading my Windows 11 Insider Preview installation to Windows 11 version 25H2.

Current system:

Windows 11 Home Insider Preview

Current build: 26300.9032

Target: Windows 11 version 25H2

Windows Update successfully downloads and begins installing the 25H2 update. It eventually asks me to restart. After restarting, Windows processes the update but then rolls back and returns to the previous installation.

Windows Update reports:

Install error: 0xC1900101-0x20017

I checked Device Manager and there are no devices showing a yellow warning or exclamation mark.

I also checked:

C:\$WINDOWS.~BT\Sources\Rollback

I found setupact.log and setuperr.log there.

Some relevant errors from setuperr.log are:

CSetupHost::CheckSetupMutex(1263): Result = 0x8007052

CSetupPlatform: Executing Sync commands: Failure while executing command

Rollback: Executing Sync commands: Failure while executing commands. hr = 0x80004005

CSetupPlatformPrivate::Rollback: ExecuteRollback failed.

Failed to merge telemetry file: hr = 0x80070057

Could someone please help identify what is causing the rollback and what I should try next?

Thank you!