It updates the current game files, it just patches it by replacing old files, it only downloads new files, not the whole game. It's not the update size you are seeing but the complete game size, once fully patched.
Also, when it updates, it can look stuck at some percentage, then go straight to another percentage very quickly, it's because it patches some precise files, if the file is big, it will take longer to update the percentage, but it's still downloading (you can verify it by going in the network usage menu).