Install RSAT Tools on Windows 10

First, Verify your current RSAT tools state. Verify again after your install process is completed.

Get-WindowsCapability -Name RSAT* -Online | Select-Object -Property DisplayName, State

This script will temporarily disable using WSUS settings as update source and switch to online. After completion, it switches back to WSUS Source.

$currentWU = Get-ItemProperty -Path “HKLM:\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate\AU” -Name “UseWUServer” | select -ExpandProperty UseWUServer
Set-ItemProperty -Path “HKLM:\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate\AU” -Name “UseWUServer” -Value 0
Restart-Service wuauserv
Get-WindowsCapability -Name RSAT* -Online | Add-WindowsCapability –Online
Set-ItemProperty -Path “HKLM:\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate\AU” -Name “UseWUServer” -Value $currentWU
Restart-Service wuauserv

No idea why WSUS Feature on Demand isnt working, but it is what it is.
Also doesnt hurt to verify that your WSUS setting got set back to 1:

Get-ItemProperty -Path “HKLM:\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate\AU” -Name “UseWUServer”