You are correct that the RunPod is intended to have a single active connection at one time.
Previously, the only means of updating Zwift RunPod firmware was through the MilestonePod app in an active connection (outside of Zwift). However, we are happy to report Zwift RunPod firmware updates are now possible from within the Zwift App (outside of the MilestonePod App).
The two apps handle firmware updates differently. When a Zwift RunPod is connected to the Zwift app, the firmware version is checked to see if a newer firmware version is available. If a new firmware is available (and you are not in the middle of a run) Zwift will prompt you to update the RunPod (or you may choose to be reminded later – in about a week).
However, as OP mentioned, you may have already updated separately through the MilestonePod App (outside of the Zwift App), then your RunPod is probably already up to date and you will not be prompted for an update through the Zwift App until a newer firmware version is available.
Either way, we would be interested to know if you are having a better experience with your updated Zwift RunPod.
And if you did update the Zwift RunPod firmware through the Zwift App. How was the update process?