Hi there,
This is an bug that was reported in server 2012 and a hot fix was rolled for this issue.
An update is available that lets you control how the Automatic Updates client applies updates in Windows 8 and Windows Server 2012. After you install this update, the "Configure Automatic Updates" policy setting will work again as it used to in previous Windows operating systems.
Allow configuration of Automatic Updates in Windows 8 and Windows Server 2012 https://support.microsoft.com/en-gb/topic/allow-configuration-of-automatic-updates-in-windows-8-and-windows-server-2012-829e3562-567b-1151-aae7-32c5a8ea823a
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