Sure, I asked them how their system checks for updates and this was their response:
Automate relies on your site to report available updates and in turn, the WPMU DEV Dashboard syncs with the Hub to report updates to Automate.
Basically, after there is an update reported on the site using the WordPress Standard Update Checks (https://wordpress.stackexchange.com/questions/194030/how-wordpress-detects-a-plugin-update) the WPMU DEV Dashboard will pass on the data to the Hub of the update being available when it syncs.
This way the updates that are reported on your website WP Admin backend will be passed on to Automate.
They rely on WordPress itself to report any updates to core/plugins/themes.
I noticed that right after successfully updating to 6.3.12, WP Engine’s update was still showing in wp-admin:
This also happens when there’s an ACF update available but your bundled version isn’t ready yet. So the Hub rightfully sees an available update and fails the update when your copy isn’t available yet.