Hi Laxman,
Error 0x80073701 on Windows Server 2022 indicates ERROR_SXS_ASSEMBLY_MISSING, meaning a required component in the WinSxS store is missing or corrupted. Since SFC and DISM /RestoreHealth completed successfully, check C:\Windows\Logs\CBS\CBS.log for entries showing missing assemblies or failed package deployment during the KB installation. If a component is missing, try installing the update manually from this link: catalog.update.microsoft.com. If the failure persists, the supported fix is an in-place repair upgrade using the latest Server 2022 ISO (setup.exe → Keep files and apps) to rebuild the component store. Currently there is no broadly documented issue specific to this update failing on Server 2022.
I hope it's helpful. If it is, please give it a thump up or an accept answer, appreciate it :)
Harry.