Because it is also a Trigger function, you can use it like UPDATE(ColumnName) and this will return true or false if you updated that coulmn.
Returns a Boolean value that indicates whether an INSERT or UPDATE attempt was made on a specified column of a table or view. UPDATE() is used anywhere inside the body of a Transact-SQL INSERT or UPDATE trigger to test whether the trigger should execute certain actions.
Microsoft's Official Response (link):
Hello Scott. Because of the ambiguity of how UPDATE can be used, it will sometimes appear to be the correct color and sometimes not. This behavior is known and by design. Thank you for you feedback.