The only Update button that exists is at the bottom the Playlist panel and has nothing to do with save. The Playlist update button is for when you double-click a playlist item, make changes, and want to Update the playlist item with your changes. When you double-click a playlist item, you are really opening a copy of it. Instead of updating the playlist item, you could use the trim tools to select a different portion of footage and then Add or Insert it to a new playlist item. All of what I just wrote has nothing to with saving a project file. The Save button saves the project to a project file.