You can refer to the below mentioned steps to hide an update.
Press Window key + X.
Select Control Panel from the list.
Under view by option select large icons.
And then click either Windows Update or Microsoft Update.
Now click on important updates available (recommended).
Click to clear the check box that is next to the KB3035583 update.
Expand the KB3035583 update that you want to hide, and then click the "Don't show this update again" check box or in my case with Windows 8.1, "hide" .
Click Review and install updates.
John- You’ll have to keep hiding tht KB update each time you manually run the windows update program- even htough we hide it- it keeps coming back trying to sneak it’s way into our download/update-
Also there are a number of other updates to windows 7-8 that act like the windows 10 spyware-
Also uninstall the following because they are doing windows spying on you too
* 3068708
* 3022345
* 3075249
* 3080149