Hi Dvir, This is Ramesh.
The KB5034441 update failing with the error code 0x80070643 is a known issue. You can fix the issue by resizing the Recovery partition to 750 MB or more.
Here's the Microsoft page that describes the problem:
https://learn.microsoft.com/en-us/windows/relea...
However, if you don't use Bitlocker, you can simply hide the update using the Microsoft diagcab tool here:
https://download.microsoft.com/download/f/2/2/f...
If you want to install the update anyway, please post back so that I can provide instructions for resizing the recovery partition.