On attempt to install update which is listed among supported updates, error
The update is not applicable is displayed:
Parallels does approve or block some updates from installing them on a Hardware Node, however this is performed only on a WSUS level. Update is provided by WSUS if it is applicable, and if it is not applicable, or not tested, it won't be available via WSUS. Any update can be downloaded manually and installed because there is no mechanism from Parallels Virtuozzo Containers for Windows side that would be able to prevent it, however only installing updates via WSUS can guarantee that your environment is properly updated.
Hardware Node should be able to install the standalone update as long as it is compatible with release, version, and edition, however in this case Windows Update service decides that update cannot be installed.
In some cases analyzing
WindowsUpdate.log would explain the reason why Windows Update server doesn't approve the update.
WindowsUpdate.log doesn't possess valuable information that can point you to the root cause it is recommended to contact Microsoft Support as this functionality wasn't altered by Parallels Virtuozzo Containers, it is pure administrative task.