I googled the actual KB and found this link: https://support.microsoft.com/en-gb/topic/kb5034441-windows-recovery-environment-update-for-windows-10-version-21h2-and-22h2-january-9-2024-62c04204-aaa5-4fee-a02a-2fdea17075a8. It seems that it updates the Windows Recovery (WinRE) environment, and the tip about resizing the partition for that is valid. You can find the link to the instructions in the KB article I linked.
I did that and the installation passed.