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If you want to be able to get automatic downloads all day, you need to disable the feature. Setting download times is meant to prevent a loss of bandwith at times when you need it (the reason, why I have my downloads scheduled to a time, when Steam is off, so I don't get any unplanned ones ever).
The other could be to limit Kbps to something really silly low yet it will still stagger running the steam updater every other millisecond.
You cannot get around game updates anyhow, once you want to start them, and client updates work on a different level, that can't be influenced through this setting.
Ah -n/m. Steam refuses to startup a game whilst online if an update is queued. I just tested it/
It insists on downloading any available updates regardless of setting time constraints when logging in. If you disconnect from your network connection then Steam burps up an error and refuses to launch a game unless Steam is in Offline mode.
So it's a moot point.
If a game has an update then Steam will apply it as soon as any connection online and user logged in no matter what settings are made unless in Offline mode. The time restraints apparently only work if you're always logged into Steam and online and the update hasn't commenced yet. Pausing only delays the inevitable.