I'll let go of telemetry altogether here to better be able to focus on the case.
I think such issues with Surface 3 are hurting Microsoft more than any failed Windows update for PC as the latter has to enter a plethora of hardware and and software configurations and is somehow expected to work in all of them, no matter what. I do defend Microsoft to some extent here as they simply can not foresee each and every odd configuration out there.
In this case however, it is Microsoft hardware and Microsoft OS and so the customers are more rightful to say "It better work!"... While not really in a comparable position, this is isolated more like iPad users getting a non-working update.
When the trouble indeed boils down to an issue concerning Microsoft firmware update / incompatible Microsoft driver and the fact that it is not the first time, I can not help but thinking that this is more than embarrassing for them, seen from a consumer point of view.