When to use UpdateApplication

In this particular scenario, it looks like you are linking an escrow(stateless) contract to a stateful contract. You may want that operation to only occur if the creator of the stateful contract is making the link. So an update operation is ok although it really does not matter as long as you know which account is making the change. Take a look at this article:

Also note in Teal3 coming in a week or so you can now get the creator address from teal in a stateful contract: Developer Office Hours | TEAL 3 Updates - YouTube