This is a byproduct of one of the largest and more ignored differences between windows and linux. The fact that Linux let’s you modify files while they are open whereas windows doesn’t.
This means that you can update a linux system by just replacing the files with the new ones while it runs. On the other side, Windows can’t modify its own files while it runs, so instead it has a second entire OS to update itself, and requires a reboot to unload all the files and boot from the updater without locking windows files.
No, silverblue does all the work before you restart the computer, and the actual work doesn’t involve replacing the OS itself but basically downloading some files and just checking a different git branch when booting.