NT SERVICE\SQLTELEMETRY User in SQL Server 2016 – Guide

I had to do two things to solve it.

1.) I didn't have mixed mode turned on. I had to right click the server node in the Object Explorer and go to Server Properties.

https://stackoverflow.com/questions/2474839/unable-to-login-to-sql-server-sql-server-authentication-error-18456

2.) restarted Windows Service for SQL Server.

You should never try to update system tables directly, in most cases it is not going to let you as you have found.

In your case you will want to build out a dynamic statement for the ALTER LOGIN without knowing how many there are on the instance. However, you will need to be cautious in doing this to ensure you do not touch logins you shouldn't. This query should give you those logins that are "non-default" or installed via the installation process:

SELECT name
FROM sys.server_principals
WHERE type <> 'R'
    AND name NOT LIKE '##%' --Exclude policy based accounts
    AND name NOT LIKE 'NT%' --Exclude system accounts
    AND sid <> 0x01 --exclude the sa

From this you just need to build out your statement to execute via sp_executesql. You could use a simple cursor or while loop per your preference, below is a template for just a basic cursor that I keep handy:

DECLARE @v1 VARCHAR(50)

DECLARE v_cursor CURSOR FOR  
/* Query of data to iterate through */ 

OPEN v_cursor  
FETCH NEXT FROM v_cursor INTO @v1   

WHILE @@FETCH_STATUS = 0   
BEGIN   
    /* build your dynamic statement */
    /* Use @v1 within query to perform action on each row */
    FETCH NEXT FROM v_cursor INTO @v1   
END   

CLOSE v_cursor   
DEALLOCATE v_cursor;