i also have auto update off and this issue hit me as well, just noticed today that error message on the admin interface, lol.
i think another option is necessary to block ALL cloud updates if you don't want them - it is a security risk if this cloud server gets compromised. imagine what may be injected into all xr routers if an overflow is found?? dangerous and very concerning.
anyway, it took me a few minutes to figure out how to fix it without a reboot. you know me, JUST SAY NO TO FACTORY RESET AND REBOOTS!
luckily, http://192.168.1.1/debug.htm still worked. was able to enable telnet...
root@XR500:/# /rom/etc/init.d/./dumaos stop
root@XR500:/# /rom/etc/init.d/./dumaos start
go back to http://192.168.1.1/debug.htm and disable telnet
all back up and running ... no reboot, no factory reset
i hope this next update fixes all the problems w/qos and device manager