You’ll need to restart the minecraft instance for it to pull the most recent version list, then you should be able to update Minecraft from inside the instance.
Seems I also have the same issue, been working fine until the client had a recent update and running the update looks like its working but doesn’t successfully download anything and apply it.
Check the instance logs to see if you’re getting the same error.
Microsoft’s download servers love to time out for no reason, so you may need to wait till they’re playing nice again. (all this would be avoided if they’d allow clients to choose a specific version)