Q; Can I allow iOS 16 security updates while prohibiting the update to iOS 17?
Yes, you can.
Yes, you can.
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No, you cannot.
You cannot stop updates themselves (Apple specification).
The time for OS Auto Update is the server-side time (Japan time by default), not the device time.
With the OS Auto Update feature, you can send an OS update command during the automatic sync that runs once a day at 2:00 AM.
Choose based on the OS version of the managed devices. For devices running a supported version, use OS Update Management (DDM). In a template, you can configure forced updates that specify the OS version to apply and a deadline, as well as update restrictions.
The OS update management features include a feature that prompts OS updates and features that restrict them.