Typically, OS updates are revisions to the software that enhance security or provide fixes for problems found in the software after its release. Updates are applied to the version of the macOS already installed and running on your computer, Big Sur in your case. The computer can be set to apply these updates automatically, or you can accept and apply them yourself if you wish.
The advice to accept all updates is generally sound, but once in a while some small thing pops up that affects some process and causes trouble. Apple usually jumps on those pretty quickly and releases updates to those updates. A very cautious user will apply updates at their own pace after watching the forums for hints of any trouble after an update is released.
An UPGRADE on the other hand is a major revision of the macOS that will include new features, perhaps a new look, and may very well break compatibility with older hardware and older applications. Catalina broke compatibility with 32-bit software and was a major disruptor. (Not that folks weren’t warned well in advance.)
MacOS upgrades cannot be applied automatically. They must be consciously initiated by a user with admin privileges. And the best guidance for upgrading is to wait. Don’t be an early adopter. Do your diligence. Allow others to shake out the problems. And wait for that first “point release”, Monterey 12.1 for example before jumping into the fun.
