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I've never seen a full System Upgrade appear in the Update section which is for macOS app updates and system point updates.
Saw the same while updating a 13,2 iMac. I asked Gemini wassup wif dat? Here's the reply:

Apple has indeed changed the "Software Update" behavior in late 2025. With the release of macOS 26 Tahoe, the interface has become much more aggressive. The "nagging" isn't just a design flaw; Apple now "stages" the Tahoe upgrade files in the background even if you only click the "More Info" link for Sequoia updates.

I got the suggestion to run this in Terminal. I do not know if it will help (as with so much AI assistance) or whether it can harm, but here is what it offered:
sudo defaults write /Library/Preferences/com.apple.SoftwareUpdate MajorOSUpdateNotification -bool FALSE

Additionally it gave commands to see if updates had already been downloaded and staged. None of this should be necessary. It is Apple acting like the Borg: "You will be assimilated (to Tahoe)." The pre-selected checkbox for Tahoe in the additional updates available window is really a bit much.
 
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Saw the same while updating a 13,2 iMac. I asked Gemini wassup wif dat? Here's the reply:

Apple has indeed changed the "Software Update" behavior in late 2025. With the release of macOS 26 Tahoe, the interface has become much more aggressive. The "nagging" isn't just a design flaw; Apple now "stages" the Tahoe upgrade files in the background even if you only click the "More Info" link for Sequoia updates.

I got the suggestion to run this in Terminal. I do not know if it will help (as with so much AI assistance) or whether it can harm, but here is what it offered:
sudo defaults write /Library/Preferences/com.apple.SoftwareUpdate MajorOSUpdateNotification -bool FALSE

Additionally it gave commands to see if updates had already been downloaded and staged. None of this should be necessary. It is Apple acting like the Borg: "You will be assimilated (to Tahoe)." The pre-selected checkbox for Tahoe in the additional updates available window is really a bit much.
Thanks for the feedback. I think that command just stops or at one time just stopped the notifications. Just going to have keep an eye on things more. Cheers.
 
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