Last month, as usual, Microsoft released new non-security updates for Windows 10. KB5035941 introduced new lock screen widgets, Windows Spotlight for desktop backgrounds, and many other non-security fixes and improvements. The update also resolved a long-standing bug with the System Preparation Tool, which was causing a 0x80073cf2 error.
The System Preparation Tool is a special utility IT admins can use for installation generalization. In other words, the app can remove information specific to a particular system so the image can be later used on other computers. Audit mode in the System Preparation Tool allows admins to apply additional changes, install drivers and applications, and more.
In January 2023, Microsoft confirmed that KB5032278 (November 2023 non-security update) and subsequent updates can cause problems with completing a system preparation using sysprep.exe due to issues with a Microsoft Edge package. Affected systems were showing a 0x80073cf error in the setupact.log and the following error message:
Sysprep was not able to validate your Windows installation. Review the log file at %WINDIR%\system32\Sysprep\Panther\setupact.log for details. After resolving the issue, use Sysprep to validate your installation again.”
Microsoft has a dedicated support page that describes how to check if your computers were affected by the sysprep.exe issue. Now, with the release of KB5035941, IT admins can fix the problem for good.
According to the official Windows Health Dashboard page, the System Preparation Tool bug and its 0x80073cf2 error only affect systems with client versions of Windows 10 22H2. Windows 11 is not affected. Also, like the recently confirmed problem with Microsoft Connected Cache in KB5034203, sysprep.exe issues are only relevant for enterprise consumers, so there is nothing to worry about if you have a regular home device.
You can find more information about the System Preparation Tool and its Audit mode from the official support articles on the Microsoft Learn website.