Quick post, on how to resolve this error, in Unreal engine 4.26. Recently updated Unreal Engine from 4.25, to 4.26, and got this error:
"api-ms-win-downlevel-kernel32-l2-1-0.dll Error - Unreal 4.26 - 2021"

Please avoid, downloading DLL files from random sources from google results. My initial search from page 1 results led to a number of dubious sites, and even youtube videos asking people to download packages.. More than likely, these are malware.

Two solutions to this:

Solution from the UE4 Forum

Head over to:

https://forums.unrealengine.com/unreal-engine/feedback-for-epic/1850218-prgram-cant-start-cause-api-ms-win-downlevel-kernal32-blah-blah-dll-is-missing/page2

The solution suggested here, is to find the DLL, in the win32 folder under systems and copy it to:
C:\Program Files (x86)\Epic Games\Launcher\Portal\Binaries\Win64

This seems to do the trick for some Windows 7, and 10 users.

Another option is to download this update from the microsoft page:

https://www.catalog.update.microsoft.com/Search.aspx?q=KB4507456

If you want to install the required DLLs from a safe source.

Option 2 - Run Unreal directly from the binaries folder in the installation directory:

Head over to your installation folder. Go to: your install directory/engine/binaries/win64/Ue4editor

Launch from there. You'll get the error messages, click through them and things will load up just fine.

It seems the missing DLL has something to do with a windows vulnerability fix, some people have speculated that it might have something to do with a graphics driver. I updated all my drivers (Graphic), and still got the error. I'm using an ATI card.

I hope this helps someone.