This folder is used by the Windows 10 Updater, it contains update logs and files downloaded by the Windows update process.

How to delete the $WINDOWS.~BT folder?

The folder can be deleted e.g. when an upgrade from windows 7 / 8 to Windows 10 failed and you want to free up space on the hard disk. This folder is protected, you can't remove it with the Windows Explorer. Use these steps:

Open a terminal Window in administrator mode and run the command

%windir%\system32\cleanmgr.exe

Source: Microsoft Answers

Windows 10: What is the $WINDOWS.~BT folder used for?

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