I notice updates after updates to InDesign that this issue has never been fixed (or maybe it's just me). When opening up an existing InDesign file that request links update, when you CLICK on "Update Links" with the mouse, all the links get updated but when using the keyboard (TAB - ENTER) it doesn't update the links. TAB - ENTER selects the "Update Links" with the keyboard rather then using the mouse. Am I the only person using shortcuts that have notice this issue?
I too can replicate the scenario and its only a MAC only issue.
Do file a feature/bug report at Feature Request/Bug Report Form
Having said that, you should also observe that a similar behavior exists for all panel.
Example: Press CMD+N to open "New Document" dialog.
Pressing TAB would let you navigate through all the entries and fields in the dialog(lets say Facing pages), but pressing enter creates a new document instead of enabling/disabling Facing pages. Observe the focus rectangle around the "Create" button( CC 2017.1 or Ok button in previous versions).
This behavior is derived from the MAC OS and can be seen for all Apps. Pressing tab and then enter selects the primary button (in this case "Do not Update Links")
If you wish to select "Update Link", the possible method is to press tab and then Spacebar
Thanks Aman for the reply. It's great to know I'm not the only one having this issue.