For KB4494440, the Win10 1607 Cumulative updates only work on the LTSB edition. The update is expected to fail on non-LTSB editions.
Our Win10 1607 fixlets don’t yet have the relevance to restrict them from becoming relevant on the non-LTSB editions.
If your systems are indeed LTSB, then that may require contacting MS.
I’ve seen this scenario before where the logged in user could successfully apply the update but the system user could not. Via a conference call with MS support, they had us remove an offending component which was part of the update we wanted to install (so I’m guessing this was likely due to some corruption from the initial attempt at installing the update) using the Windows DISM command. After that, the update was able to to be installed as system user, which is the account that BigFix uses.
You would likely have to point to the errors you’re seeing in the Windows Update/ CBS logs and ask why those errors are there and how to resolve them. Otherwise, they may just run you through the typical system check scans (which reported no issues for us) and close out the case as “the patch could be installed manually”.