anyweb's post in 2016/ConfigMgr-CB WSUS not getting Win10 Upgrade was marked as the answer
hi, look at your logs again, it's ok if you missed it, so did I
Feature update to Windows 10 <SKU>, version 1607, <language> are the actual updates for Windows 10 1607, so it's working fine !
i.e. the Windows 10 upgrades are now known as Feature Updates...