To upgrade Windows on native boot VHD, it must be temporarily attached to a virtual machine.
Here is how-to.
1. Download latest Windows 2004 iso.
2. Clone the VHDX. (because currently using VHDX is locked by OS)
3. Create new Hyper-V machine with 3 drives, 1st one is dvd for windows iso, 2nd one is new hdd for boot sector, 3rd one is existing hdd for cloned VHDX. (create 2nd generation if the VHDX is UEFI)
4. Power on Hyper-V machine and boot with windows iso.
5. Enter the command prompt. (shift+F10)
6. Create bood record using bcdboot. (bcdboot C:\Windows) If failed this step, just install windows normally to 2nd HDD and create boot record via recovery cmd prompt.
7. Reboot Hyper-V mahine with 3rd HDD (target VHDX).
8. Upgrade windows by run the setup on mounted windows iso.
9. After finishing upgrade, turn off Hyper-V and replace the current OS VHDX to upgraded VHDX. (via recovery command prompt or etc)
10. Some settings may need to be re-configured. (activation of windows, some device drivers, etc)
OS