There are 2 liveupdate settings
whatever you change under policy tab is for clients
ideally your clients should be getting updates from SEPM and not from internet
Open SEPM
Policies
Liveupdate policy
check the option use the default management server
unchek use symantec liveupdate server, once you uncheck this the Lu schedule will be grayed out
Admin - server tab -Liveupdate scheduel is for SEPM.
:)
change the clients to get from SEPM, they wont go outside and will get only delta from SEPM, issue fixed :)