For ESXi hosts, updates are all-inclusive. The most recent update contains the patches from all previous releases.
The ESXi image on the host maintains two copies. The first copy is in the active boot and the second one is in the standby boot. When you patch an ESXi host, vSphere Lifecycle Manager creates an image based on the content of the active boot and the content of the patch. The new ESXi image is then located in the standby boot and vSphere Lifecycle Manager designates the active boot as the standby boot and reboots the host. When the ESXi host reboots, the active boot contains the patched image and the standby boot contains the previous version of the ESXi host image.
When you upgrade an ESXi host, vSphere Lifecycle Manager replaces the backup image of the host with the new image and replaces the active boot and the standby boot. During the upgrade, the layout of the disk that hosts the boots changes. The total disk space for an ESXi host remains 1GB, but the disk partition layout within that 1GB disk space changes to accommodate the new size of the boots where the ESXi 7.0 image is stored.
For rollback purposes, the term update refers to all ESXi patches, updates, and upgrades. Each time you update an ESXi host, a copy of the previous ESXi build is saved on your host.
If an update fails and the ESXi 7.0 host cannot boot from the new build, the host reverts to booting from the original boot build. ESXi permits only one level of rollback. Only one previous build can be saved at a time. In effect, each ESXi 7.0 host stores up to two builds, one boot build and one standby build.
The remediation of ESXi 6.5 and 6.7 hosts to their respective ESXi update releases is a patching process, while the remediation of ESXi hosts from version 6.5 or 6.7 to 7.0 is an upgrade process.
From the vSphere Lifecycle Manager settings, you can configure the host remediation process to skip a host reboot during host patch and host upgrade operations. This configuration setting is called Quick Boot. For more information about configuring the vSphere Lifecycle Manager remediation settings, see Configuring the vSphere Lifecycle Manager Remediation Settings.