This is according to a bunch of posts on Google’s forums in which users have been voicing their complaints. Note that for some reason this seems to be only affecting the smaller 5-inch Pixel handset, and that the larger Pixel XL does not seem to have any issues when installing the update. Users with the Pixel are simply greeted with the “installation problem” message when trying to update.
As to what the reason might be, it’s really anyone’s guess, although it is a bit strange since the Pixel and Pixel XL are almost identical in terms of hardware save for its display size, so it is strange that only the smaller version is affected. However the good news is that Google’s community manager has acknowledged that the company is looking into the problem, so hopefully we’ll have an answer soon and that the problem will be fixed.