Windows executables are opened with mandatory exclusive locking. So you can't overwrite a program or its DLLs while any instances of it are running. If a DLL is widely used, that makes it essentially impossible to update while the system is in use.

There is a registry key which allows an update to schedule a set of rename operations on boot to drop in replacement file(s). https://blogs.technet.microsoft.com/brad_rutkowski/2007/06/2...