I ended up having to delete a bunch of games from my computer, even though the game itself doesn't take up the 42 Gb, to download the update it apparently needed 125 Gb. Then it worked.
I have so many games off Xbox Game Pass that I really don't have a lot of free space these days.
Thanks for the update that making HD space has fixed the "NotEnoughSpace" error message. We will now close the thread since the issue has been resolved.