'Update Tonight' occurring during the day (?)

This isn't a managed / supervised device handled by your companies IT department?

I only mention this because I manage many Macs at work and we typically issue a command from the MDM - Mobile Device Management server to instruct the Macs to check for the dot release updates and install while offering the user 3 deferrals. Meaning they can cancel the updates up to 3x before it's forced upon them and possibly during the day. They would also see the upgrade tonight option and we allow that as well. If my InfoSec department reaches out and advises that the latest dot release is a critical urgent one. Then we force an update with only 1 deferral. If it's crazy urgent, then we force the update immediately as soon as the Mac is online. The latest 15.4.1 and all the other dot one releases are critical, there are fixes for active exploits in the wild.

We also defer major annual releases to 90 days which prevents the users from even seeing the updates until the 90 days expires. Doing so gives all the 3rd party developers a chance to upgrade and fix bugs with the new release. For example, CrowdStrike wasn't ready Day One of macOS Sequoia 15.0 release. It took two Apple updates before CrowdStrike could release their new version to be compatible with changes in Sequoia.

If your Mac is managed by your employer or school, it is trying to enforce security requirements. Some employers are in industries that are highly regulated and advanced security measures are required.

That being said, if your employer provided you the Mac and they manage it remotely. You should call your IT Help Desk to report that the update is failing. Settings > General > Device Management is a way to check if you are managed. If you see a list of profiles then you are being managed in some way. Normally it says "No profiles installed".

If you are just a retail Mac user and you own the Mac and no company nor school manages it. Then something just hiccup'd and failed, etc. Try booting into Safe Mode and re-installing the failed update. Check all your 3rd party software and update it to the latest version.

I have never set my Mac to automatically update/upgrade the operating system. Once you do that, you are back in control of when you can update your Mac, with appropriate time to close all documents and applications beforehand.

When presented with the recent 15.4.1 update, in the early afternoon if I recall, I was given a choice of now, or later tonight buttons. Now is always convenient for me.

I believe "tonight" is a euphemism for next time it is idle. Once you enter your password in response to that, you should have seen a warning in the dialog to make sure you save your files.

I have Resume enabled so I never save anything. The documents just re-open to where I was after restart (power failure, update, etc.).

I suppose there are apps that don't take advantage of the Resume feature, so, if I used them, I would do what I do on Windows and save early and often because you never know when an app is just going to crash or corporate IT is going to force restart to run the weekly Windows updates.