I have a $99 10" tablet with 32GB, 2GB RAM and Z3735F CPU running Anniversary Update just fine (surprisingly well I would say)... but the only way that AU would install was from a 8GB USB stick built with the Windows Media Creation tool. A clean install of AU left 17GB free of 28.4GB. I don't think this is anything a general consumer would go through though, so probably most of these devices will effectively be left on the November update from last year.
But, I wanted to point out that saying the AU update is too large for 32GB devices is factually incorrect.
I'm thinking part of the problem is that you end up with a layer cake of recovery partitions. HP's then MS's, etc. I ended up deleting and resizing partitions on mine to get me the extra space needed to get it usable.