I don't know if this answers your specific question...but I liked the question enough to research it out and found this:
Specifically (in case the link goes dead):
Installing a Hotfix
By default, all components on Windows systems start on the GDR branch
following each major release. When you install updates from Windows
Update for a GDR component, it gets upgraded with the GDR version.
When you install a specific Hotfix, the files and components in the
Hotfix package are migrated to the LDR branch. At this point, that
particular component is marked as a LDR component. If you install a
newer Update over this component, the Windows servicing technology
will automatically install the appropriate latest version from the LDR
branch for you. This is possible because each Update package ships
with both the GDR and LDR versions of the component.
Once a component is marked as a LDR component, the only way to move
back to the GDR branch is to uninstall all Hotfixes for that
component, or move to the next available service pack.
What would happen if a user installed a Hotfix, and then sometime
later installed the next service pack? Well, in that case it depends
on the Hotfix and when it was built.
If the Hotfix was built before the service pack, then the component will be moved to the GDR version contained in the service
If the Hotfix was built after the service pack, the component will be migrated to the post-service pack version of the component,
and will stay on the same branch that it was originally on.
In order to make this work, these packages contain both the RTM GDR
version, the RTM Hotfix branch, and the SP1 Hotfix and GDR version of
All fixes built for Windows are cumulative in nature by branch, i.e. a
new update will contain the new fix, as well as all the previous fixes
for that branch. Referencing the chart above, installing fix #4 can
get you fixes #2 and #4 on the GDR branch. If the component is on the
LDR branch, then the user would get fixes #1-4.
Finally, the servicing technology has to handle the case where you
need the functionality of an older Hotfix (e.g. “Fix #1” in the
diagram above) but you may already have installed “Fix #4” which might
be a critical security update. What happens is that when the GDR
branch of a fix is installed, it also places a copy of the Hotfix
version of the same fix on the system. When you run the installer for
Hotfix #1, it detects that a newer version of the file is already
installed, but it also detects that it needs to migrate it to the
Hotfix version of the binary that was previously stored on the system.
The result is that you end up with the Hotfix binary for Fix #4, which
has both the Hotfix you need plus the cumulative set of security
Hope that helps you.