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I have created an ExcludeList.txt under .\wsusoffline\client\exclude\custom
and listed KB971033

When the update was done, I saw that thee above update was installed.

Since this was a test on a virtual machine, I rolled back and tried to add KB971033
to the ExcludeList.txt under .\wsusoffline\client\exclude\

I run the update again and still the update was installed.

How can I exclude unwanted updates properly?

I hope someone can help.

Info:
WSUS version: 10.2
Windows 7 pro x32

That Update is not part of WSUSOU. But the Windows License Validation might install it automatically in background (it is part of the validation process). Additionally, Windows Updates set to Automatic could have installed it.

Check the install media / repository. Is the KB971033 in there? Can you find a wsusofflineupdate.log entry that shows it was installed by WSUSOU?

Test: Since it is a VM, disconnect the virtual cable. Make sure that update is not installed, and it is not in \Windows\SoftwareDistribution\Download. Then run WSUSOU and install the updates. Finally, check again. It should not be installed that way.

Since I posted earlier, I found (to my shame), that the update was already installed in the initial state, before I started my tests.

So, once I discovered this, I rolled back, uninstalled the update and run the full WSUS offline update from the start, with my exclude list under client\exclude\custom, and voila... It wasn't installed, as expected.

I am sorry for wasting your time, and thanks for the help.