How to update when using extroot update

Updating LEDE with extroot going wrong for a second time for me. The first time i decided start again by formatting the USB drive.

This time I am sure that "Keep settings" was checked but still after reboot the USB isnt even recognized. Installed a few packages and now i have support for ext4 and the drive is finally visible as device in /dev. Now its time to fix the overlay mount.

So what is the right way to update when using extroot?

I do not think there is an easy method to update when using extroot... Best I could figure out was to un-extroot the device, do the upgrade, and then re-extroot the device again, using a formatted drive.