Apparently there are two types of Packages, and they are Express (Windows Update) and Self-Contained (WSUS and Microsoft Catalog). As you can imagine there is a difference. Express Packages are smaller and primarily come from Windows Update. When running Windows Update, you can do a search in C:\Windows\WindowsUpdate.log and you will see that the Payload Type is Express (ptExpress).
Looking at the CAB files in C:\Windows\SoftwareDistribution\Download we will find that several of them will be *-express.cab. Also note the file sizes are very small for Updates.
These files are not true Updates and while you may be able to import Express files, you will get nothing but errors in WinPE when running the DISM Apply Updates Office command after the OS is decompressed. So no you can’t use CAB files from Windows Update (by default).
Now when running Windows Update from a WSUS Server, it does not use Express Installation Files by default. This is validated when reviewing the C:\Windows\WindowsUpdate.log as it will show the payload type is Self-Contained (ptSelfContained).
And when we do a search for all CAB files in C:\Windows\SoftwareDistribution\Download, no mention of Express.
And you guessed it, these can be used by MDT. Does this matter? Is this a big deal? Yes . . . more to come.