A bit unsure about what does the update parameter of {{ls}} does. Must it always be update=en for all translations? or it should be present when the translation is outdated?

That parameter gives the name of the language in its native name (i.e. in its own script if available), for example, you see "English:" in bold when it's {{ls|en}}, and you see "বাংলা" when it's {{ls|bn}}. So when you are translating, change the en to the language code of your translated language. For example, if you translate to zh-hans than, change it to {{ls|zh-hans|...}}.

Regards,
Tanvir Rahman
Wikitanvir on Wikimedia