A solution courtesy of the Reddit post is described here:
https://www.yourwindowsguide.com/2025/12/25h2-repair-install-failed.html#gsc.tab=0\
Open/Extract the Windows 11 25H2 ISO file
- Open the ISO file and navigate to the Path – sources\Replacementmanifests folder. In that, delete the file \sources\replacementmanifests\tpmdriverwmi-replacement.man from the Windows installation media.
- On the affected system, we would instruct Windows not to try replacing the manifest from 25H2 ISO file. Concurrently, the file handling the manifest is \Windows\WinSxS\migration.xml. Take Ownership of the file as Step 1 (Steps are here if you need).
- Open the file using Notepad. The file would have a lot of <file></file> tags.
- Search for microsoft-windows-tpm-driver-wmi. There would be 2 entries. Delete both of them, as per the GIF.
- Clear the upgrade cache by deleting the $WINDOWS.~BT folder in Windows C drive.
- Disconnect the system from the internet to keep the upgrade environment offline.
- Restart the upgrade process and proceed with the repair install again.
The update should now be complete successfully.