The KB5034204 Windows 11 update is causing issues for some users, with errors like 0x8007000d reported for failed installations and problems with the taskbar and file explorer for successful installations.
The impact of the KB5034204 patch is likely limited because it is an optional update that requires manual installation by the PC administrator. If you have not installed the most recent Windows 11 update, it is advised to skip it.
Issue encountered during the installation of the optional Windows 11 KB5034204 update

Users on the WindowsLatest website mentioned in the comments that the optional January update was not installing correctly. Some users who were able to install it are experiencing issues with the taskbar and file explorer.
Windows Comments Hub users have reported that the 0x8007000d error is frequently occurring during unsuccessful installations. An error message identifying missing files appears when the installation process reaches 100%.
If the installation is unsuccessful, Windows will automatically check the update. In such instances, a message will be displayed on the screen.
There’s no need to be concerned if something didn’t go as expected. Just make sure to keep your computer powered on.

Users have mentioned that the issue persists despite utilizing the Windows Troubleshooter and System File Checker (SFC).
File explorer and taskbar become unresponsive.
After installing the KB5034204 update, certain users experienced issues with the file explorer and taskbar freezing and becoming unresponsive.
Sometimes, the desktop screen is empty, while in other instances, an error message related to “explorer.exe” is displayed during shutdown.
Users also reported that the desktop and taskbar icons became unresponsive following the installation of the KB5034204 update.
During tests conducted by WindowsLatest, the taskbar vanished. To make it visible again, users need to press “Windows + X” keyboard shortcut. However, even after doing this, clicking the Windows button on the keyboard or the Windows icon will not display the Start menu.