Microsoft has announced that they will not fix the error 0x80070643, ERROR_INSTALL_FAILURE caused by the big size of WinRE that no longer fits the recovery partition. The company didn't provide any automation solution or any other kind of fix. So affected users have to manually resize the partition or reinstall the OS to continue to receive future updates.
Windows 10 users encountered this issue after the release of the January cumulative update, KB5034441. It closes a in BitLocker vulnerability that allowed to bypass the drive encryption from Windows Recovery Environment (WinRE). After fixing WinRE, its image to become larger and in some cases the recovery partition was not large enough to complete the upgrade.
Microsoft has quickly pointed users that they can manually resize the recovery partition, and promised to release a full-fledged fix to be included in future updates. But this never happened.
In order to install updates, you will need to manually increase the size of the recovery partition. For that, it must have at least 250 MB of free space. To adjust its size, you can follow this official guide.
Finally, Windows 11 is also affected by the same issue. Systems with a recovery partition of a small size can stuck without updates. Microsoft is yet to announce if they are releasing an automated solution for Windows 11 users, or they should do everything manually, too.
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or better yet, use wushowhide.diagcab, WAU Manager, wumgr or windows update minitool to hide or block the offering of the KB5034441 update for Win10 21H2/22H2.
MS consider to release those updated ISO files for Windows 10 2021 LTSC and 22H2, and even Windows 11 23H2 with the updates already slipstreamed in the Windows image and WinRE partition already adjust on 250 MB, especially if they want a fresh install.