Windows 10 Update 20H1 will have a "cloud download" that downloads the latest Windows files from Microsoft and uses it to reinstall Windows. Now Microsoft's Aaron Lower has explained exactly how the cloud download will work.
In a blog post Posted on Microsoft's Windows Insider blog, Lower looks back at the history of Windows 10's built-in reset options, including recovery partitions. He explains how Windows 10 built-in reset function works:
The next major improvement came with Windows 10 and "imageless" recovery. This is done by building a new copy of Windows from the existing installation. Since this approach does not use a recovery image, it saves disk storage space and preserves the latest security updates. The trade-off of this approach is that it can take more than 45 minutes and cannot always repair Windows if the installation is really in bad shape or too corrupt. This is where this last cloud upload option in Reset this PC can help.
Beyond taking a bit more time and requiring a Windows installation without corruption, the standard imageless recovery feature has another lower issue not mentioned: If you don't have the latest Windows updates installed, you will need to install them after performing the process reset.
The new cloud download feature avoids these drawbacks. Now, rather than trying to gather all the files it needs from your computer's local storage, Windows can download the latest Windows installation files from Microsoft's servers. You will get the latest files, so no major updates will be required afterwards. It's like creating a USB stick with the latest version of Windows 10 and reinstall from that, except that you don't have to worry about creating installation media.
To use this feature on Windows 10 update 20H1 – currently under development – you will only have to go to Settings> Update & Security> Recovery and click on "Start" under Reset this PC. After choosing to keep your files or delete everything from your PC, you can choose "Cloud Download" to download the installation files from Microsoft servers or "Local Reinstall" to use the local files on your system .
Lower also explains exactly what happens during the reset process. In summary, Windows will download the files and then restart in Windows RE, the Windows recovery environment. The installation process will bring together the drivers for your current Windows system, ensuring that your hardware will continue to work. It will "also apply OEM customizations, including preinstalled Windows applications", so don't count on it to remove any bloatware installed by your manufacturer on your PC. You may still need the Fresh Start function for that. See the blog post for more details.
The cloud download will also be available in the recovery environment which loads if you cannot boot your PC. You can use the "Reset this PC" function to download new files from Microsoft and reinstall Windows, even if Windows itself is corrupted and cannot start.
Lower notes that connecting over a wireless network from the recovery environment can be a problem – it is up to the PC manufacturer to load or not the drivers that can activate it.