In the portal I found that Patch orchestration options setting allows you to control the Windows Automatic Updates setting. This option is available under Management for single VMs as well as VMSS if the orchestration mode is set to Flexible.
Since you are not seeing that option, I am assuming you are using the Uniform orchestration mode. When creating a VMSS with Uniform mode the Windows Automatic Update is defaulted to whatever the image has it set to.
If Flexible orchestration mode is not an option, you will need to first update the VM image and disable Windows Automatic Update. One way to do this is by launching a standalone VM from the image and setting Patch orchestration options to Manual updates. After the VM is created you can create an image from it. When creating the VMSS with this image Windows Automatic Update should now be set to Manual inside the OS.
Hope this resolves your issue. Let me know if you still need assistance or have any more questions.
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