UPDATE: What seemed like yet another problem with yet another Microsoft patch has turned out to be something else. The issue, as it turns out, was a combination of customers installing KB971033 and Microsoft making changes to its license activation servers.
A recent update to the Microsoft Activation and Validation unintentionally caused a “not genuine” error on volume-licensed Windows 7 clients that had KB 971033 installed. The change was introduced at 10:00:00 UTC on January 8, 2019, and was reverted at 4:30:00 UTC on January 9, 2019.
The article goes on to recommend uninstalling KB971033.
Microsoft has yet to apologize for causing the widespread panic, only taken time to explain it.
— original article —
UPDATE with Workaround – Tracking: KB971033 Affecting KMS for Windows 7 Clients
According to new reports, there’s a bug in the KB971033 update that is causing problems with Windows 7 clients and KMS.
There’s also apparently a bug affecting KMS for Win7 clients… We started getting tickets this week about it after the patch was released. I know not everyone is a KMS customer but we just got word of a verified issue & told to uninstall kb971033. https://t.co/OgsgXteYvx
— DesktopMgmt (@DesktopMgmt) January 10, 2019
UPDATE: A poster to a thread on Reddit concerning this issue offers a workaround that was obtained by Microsoft:
Action Plan :Uninstall KB971033
Run Command Prompt as administrator
i. Type: net stop sppsvc
ii. Type: del %windir%\system32\7B296FB0-376B-497e-B012-9C450E1B7327-5P-0.C7483456-A289-439d-8115-601632D005A0 /ah
iii. Type: del %windir%\system32\7B296FB0-376B-497e-B012-9C450E1B7327-5P-1.C7483456-A289-439d-8115-601632D005A0 /ah
iv. Type: del %windir%\ServiceProfiles\NetworkService\AppData\Roaming\Microsoft\SoftwareProtectionPlatform\tokens.dat
v. Type: del %windir%\ServiceProfiles\NetworkService\AppData\Roaming\Microsoft\SoftwareProtectionPlatform\cache\cache.dat
vi. Type: net start sppsvc
vii. Type: slmgr /ipk 33PXH-7Y6KF-2VJC9-XBBR8-HVTHH
Type: slmgr /ato
As others have correctly pointed out, the key in step vii is for Windows 7 Enterprise. Use the correct key for your environment. https://docs.microsoft.com/en-us/windows-server/get-started/kmsclientkeys