Ok, i found the root cause of this: latest ISO contains new Dell SUM:dell-system-update-2.0.1.0-22.09.00.x86_64.rpm this SUM asks for config password and makes upgrade process wait for user input. I've manually rebuilt FW upgrade ISO containing older SUM:dell-system-update-1.9.3.0-22.01.00.x86_64.rpmWith this version FW upgrade process completed successfully.    
Hello, i've built a latest "smart bootable iso". after booting into it automatic firmware update does not start. i see "enter passphrase for encrypted config file:" prompt. Pressing "Enter" without any password starts upgrade process. But the problem is i need upgrade to start automatically. There is no way to press Enter key on hundreds of servers. This was tested on multiple (6) machines. Any ideas how to fix this? Thank you.
enter passphrase for encrypted config file