Can someone explain what’s going on here? Is there a design mistake here? Does the app update in-place rather than side by side so it simply launches the update

Can someone explain what’s going on here? Is there a design mistake here? Does the app update in-place rather than side by side so it simply launches the updated version on next launch? If it’s side by side then why does it even affect the old version it force a restart? And if it’s not side by side then who the hell designed it?