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I love that someone gave me a steaming mad emoji for this comment. So weird.
Yeah, there were quite a few strange ones. I was thinking Bruce Banner might be a member.

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This update is only for the base M3 chip. You didn't show us what chip you're using, but I'm guessing it's the Pro or Max since you're running three displays.

The base M1/M2/M3 chips can only run one external display regardless if the lid is open or shut. This update makes it so that the base M3 14" MBP can run two external displays when in clamshell mode.

The M1/M2/M3 Pro chips can run up to two external displays, plus the built-in one.

The M1/M2/M3 Max chips can run up to four external displays, plus the built-in one.
Makes sense
 
I'm wondering who's actually running dual-external display with the lid closed?

You lose the keyboard, Touch ID, webcam, speakers, trackpad, and obviously the Retina display. So yes, technically, the M3 supports dual external display. But in practical terms, it really doesn't.
Me. I have use two large monitors when working from my desk, especially when I am working on creative projects. It comes in handy when you need to reference something to not have to close a tab.. also for dragging and dropping. I have a docking station that supports external keyboard and mouse. -- I was a disappointed to finally the get MacBook Pro I have long wanted only to realize that I can't connect my double monitors -- which is huge for me.

Unfortunately, I've installed the update, but I am still only able to get one of my monitors to show. The good news is I haven't had the laptop long so I might just return it and get it a different model that supports multiple external monitors.
 
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