It has been found that under certain circumstances the managed device upgrade package does not get installed ('Programs and Features' still lists the old version) even though the Selector UI indicates otherwise.
If the policy that is targeting the device contains one or more broken packages (self-heal does not work due to no registry key to check, downloads fail, etc), then the apply policy action never completes preventing the MSI upgrade action for the managed device upgrade package from being triggered; however, the Selector's XML file is updated BEFORE this takes place which is why it displays the package as being installed.
The broken packages need to be corrected:
Add the required registry information to packages that cause the self-heal process to fail or remove them from the policy.
Either distribute the binaries for packages that fail to download or remove them from the policy.