GPP Files - Update Option Not Updating

I have created a new GPP using the Files preference to keep a file on the user's computer updated.  However, I have found that the Update option does not actually update the file when it changes on the servers - it only adds it if it doesn't already exist.

I enabled tracing and found the following log entry:

Destination file '<path to file>' existed so copy was skipped because this item is in create or update mode.

Note that I have tried the Replace option and it works.  But, I feel that the "Replace" option would not be as efficient as the "Update" option.

Thanks.