I've used syshardener on and off and I haven't had any issues with updates. Just to clarify, when you say updates are you referring to windows updates, program specific update, or all updates in general. If its windows updates, if I'm not mistaken, powershell shouldn't affect it and IMO 3rd parties shouldn't be using powershell to update. Also I don't think that setting takes effect unless you check the box at the top, but I could be wrong on that one. Did you make any other changes to syshardener, or is everything at default?
Just to keep in mind, while a program like syshardener is really good, it can break things if one isn't sure of what that setting is doing. I'm not saying you don't know what your doing, but just want to highlight potential cons with programs like these.