When running the auto-select to upgrade the DDC component from one version to another, the ISO does not show "upgrade" option instead it shows an option to install the component from scratch. 

In this scenario, we need 2 DDCs - working (where the upgrade option is detected), non-working (where upgrade option is not detected).
Go to C:\windows\installer (put this on address bar, as Installer folder is not by default visible) folder on both working and non-working DDCs and check to see what all the MSIs are missing from the non-working DDC.
Once the missing MSIs are identified, copy them from working to non-working DDC.
After doing the above action, ISO should be able to detect the upgrade option . 

Note->

To identify which MSI belongs to which component, you can refer to the registry on the DDCs ->
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Installer\UserData\S-1-5-18\Products

Problem Cause

Non-working controller is missing almost all the required MSIs for the ISO to detect the upgrade .