I forgot to mention that I also tried this method to install Windows 7 Install Windows 7 without USB or DVD without upgrading!
It ended up with Blue Screen ACPI error that said "Update BIOS" lol
Same problem here with an Intel Atom NUC, using an USB stick (Flash update fails).
Finally, I use an old USB stick (Kingston Data Traveler 2GB, FAT format) and the update succeed, so I think there's a problem with new USB sticks and the file system format used.
I have seen what I think is a related problem with some UEFI BIOS (including Intel NUCs), reading the EFI partition which must be in FAT32. Sometimes, if you don't use a specific cluster size, the BIOS can't read the EFI partition.
This link from Microsoft describes the default cluster size for FAT32 formatted disks, check against your USB stick:
dbuvinic, thank you very much!
I guess it was the cluster size. I had used the default settings and now I specifically choosed the cluster size for FAT32.
F7 update didn't work, but I was able to update the BIOS using the BIOS Recovery Update method.
As I'm writing the Windows 7 installation is in progress