...
Before downloading the updates from the result list, WuInstall checks in the cache_dir if the update has already been downloaded there by another machine. If the update is not in the cache folder, WuInstall downloads the update (from the configured download location - WSUS and/or windowsupdate.com) and puts it into the cache directory, in a subfolder, which has the same name as the Update ID as name.
If the update is present in the folder (if there is a subdirectory with the Update ID), WuInstall tries to copy the update from this shared cache folder to the local update cache. If this fails for some reason, WuInstall deletes the subdirectory in the shared cache folder (because there is apparently something wrong with the update) and downloads the update directly from the Internet.
...
After the download is finished, WuInstall checks the cache again and finds the just downloaded update there and copies it to the local cache of the machine (the local cache is usually located in the following directory: Windows\SoftwareDistribution\Download)
...
Now, the update is present in the cache directory and is copied from there without downloading it from the Internet or WSUS Server (which apparently saves a lot of Internet bandwidth since the cache directory is in the local network):
...
This option does the same as /install_cache, but it only downloads the updates, without installing them (which can be used for example to populate the cache with updates, without installing them).
...
This option clears the local windows update Windows Update cache.
The local cache is located at %systemroot%\SoftwareDistribution\Download.
...