So the update fixes CVE-2025-21204 by updating folder permissions for C:\inetpub even if it was created by a user beforehand. Also a normal user can't create files in C:\ only folders.
https://www.windowslatest.com/2025/04/11/windows-11-microsoft-warns-do-not-delete-inetpub-folder-after-causing-confusion/
Users that already deleted the folder should temporarily install IIS to create the folder again with correct permissions.