After several weeks testing, I’m sad to tell you all that at least currently, Windows 10.0.14394 (aka 1607) still cannot work with WSUS.
Problem: If there is Windows related package push from WSUS, svchost processes on Windows clients keep crashing.
Check this for details: https://social.technet.microsoft.com/Forums/windows/en-US/31718a20-64dd-43f7-87d7-c86f03f74a4d/14393-windows-update-crash-every-minute?forum=win10itprogeneral