Windows 10 – autounattend.xml – Update and / or new installation possible

I am currently working on an autounttend.xml for Windows 10 Enterprise LTSC. The file resides in the root of ISO / DVD, so setup.exe always takes it into account. E.g. I set up different things like "OOBE", "ProductKey", "AcceptEula" and so on. This works well when I boot from the ISO, all the options work and I finish with the clean installation expected.

The problem occurs when I start the configuration from a running Windows 10 Enterprise LTSB (version 1607). As soon as the configuration finds autounattend.xml, it does not give me the ability to select "update". Autounattend.xml has the following option that does not seem to work:


The behavior of an ISO without autounttend.xml present is that the launch of "setup.exe" from a running operating system immediately passes to "sources Setupprep.exe", which is responsible for the update. This handover does not work if autounattend.xml is present. This is obviously correct, but I expected that the aforementioned option to provide this functionality, as its name suggests. I am doing something wrong? Is there any way to combine the update and the option for a new installation?

Any help is appreciated! Thanks in advance!