Hello Wool Sock Welcome to Microsoft Q&A Platform, thanks for posting your query here.
Yes, you are correct. If automatic OS image upgrades are enabled on a scale set, an extra patching process through Windows Update is not required. The automatic OS image upgrade feature is designed to keep your operating system up to date with the latest security patches and updates. The upgrades are performed automatically by Azure and are usually released within a few days of the latest security patches and updates being released by Microsoft. The exact timing of the upgrades can vary depending on the availability of the new updates and the size of your scale set. However, you can expect to receive the latest patches and updates within a few days of their release. I hope this helps!
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