As various commenters and answerers have noted, update is a more neutral term to describe revised versions of software that may offer no functional improvement on the prior version.
Another term that people in the tech industry sometimes use to describe such revisions is refresh. At the computer magazines where I worked for many years, writers often used update or refresh in place of upgrade in situations where upgrade was clearly a misnomer. (On the other hand, they also used update and refresh as straight-up synonyms for upgrade, so there is plenty of overlap in actual usage of these terms.
An early example of this usage appears in Dr. Dobb's Journal of Software Tools, volume 19 (1994) [combined snippets]:
The sheen on the miracle fades, however, when we try to run OS2fW with Windows 3.11, Microsoft's so-called refresh release of 3.1. ("Windows 3.11 — It's not an upgrade. It's just our way of letting you know who's boss.")
Evidently even Microsoft had qualms about calling Windows 3.11 an upgrade; hence, its resort to refresh as a less presumptuous characterization.
A literalist might argue that there is nothing refreshing about software that fails to improve on its predecessor—and that literalist would be right. But refresh is understated and subjective about the merits and extent of a revision in a way that the objectively assertive upgrade is not. In fact, many people now understand refresh to mean a minor and largely cosmetic revision—an X.11 rather than an X.1—although it may also refer to a periodic update of existing lines of hardware or software, whatever the extent of the change may be.