How do I manually update a windows instance and why was this not mentioned anywhere?

You are right, it’s not mentioned, because the manual update doesn’t supported.
Since that version has a bug, the solution is (elevated PowerShell):

Stop-Service storagenode-updater;
[Net.ServicePointManager]::SecurityProtocol = [Net.SecurityProtocolType]::Tls12; curl https://github.com/storj/storj/releases/latest/download/storagenode-updater_windows_amd64.zip -o "$env:TEMP\storagenode-updater_windows_amd64.exe.zip";
Expand-Archive "$env:TEMP\storagenode-updater_windows_amd64.exe.zip" "C:\Program Files\Storj\Storage Node\" -Force;
Start-Service storagenode-updater;
Start-Sleep 15;
Get-Content "$env:ProgramFiles/Storj/Storage Node/storagenode-updater.log" -tail 10;

Alternatively you can download manually the storagenode-updater for Windows from the latest release, unpack it, stop the storagenode-updater service and replace the actual storagenode-updater.exe in the "C:\Program Files\Storj\Storage Node\" folder with a new one, then start the storagenode-updater service back and check logs of storagenode-updater.