Update small system components (packages) and load the old into ram untill rebooting; I don't think this is possible on windows.
A/B Image Based Updating; Android and a few Linux distros have this; probably one of the most stable methods.
Live boot updates/Kernel-space Hot Patching; found mostly in Linux servers, and distros with a patched kernel; used mostly for security updates which is what windows is doing here, but Linux can do feature updates this way too.
Cool, so its possible then! I hope Microsoft makes it functional for Windows, too.
It comes in 3 forms.
As much as I don't like window I want to see it get better :)