Recent bugs on Windows 10 (build 9879) caused frequent Explorer.exe crashes, on an attempt to fix the problem Microsoft issued the update KB3020114. However, many Windows Insiders discovered that there was an issue causing the install to fail.
Microsoft reports that 12% of PCs are experiencing the installation problem. According to the company the issue is result of two bugs:
In build 9879, we introduced some new System Compression code that systems with SSDs can take advantage of to reduce disk usage by the OS. In some cases, the logic for low-space detection is inverted, and we compress automatically as a background operation.
On PCs have had system compression enabled, an additional bug with how the file system tracks deletes caused the installer to think that the temp files failed to extract correctly, so the installer fails because it thinks it cannot complete.
Because this is a technical release and a new build is coming at the end of January 2015, Microsoft will not release a revised of the update. However, the company is issuing an official workaround:
1 Restart your PC
2 Open Command Prompt as an Administrator and run:
3 Immediately afterwards run Windows Update and Check for Updates
4 Go to Windows Update and install KB3020114
5 Restart when prompted
Microsoft says is working to fix these two bugs and make sure no additional problems block hotfix to install in coming releases of Windows 10.