In order to properly update Kali Linux on a USB, persistence must be setup. If persistence is not setup, re-imaging the USB with an ISO from the weekly build will be a suitable update.

The best way to update Kali on a USB is to follow the same way you would on a full install.

First ensure that etc/apt/sources.list is properly populated:

[email protected]:~$ cat /etc/apt/sources.list
deb http://http.kali.org/kali kali-rolling main contrib non-free non-free-firmware
[email protected]:~$

After that we can run the following commands which will upgrade us to the latest Kali version:

[email protected]:~$ sudo apt update
[email protected]:~$
[email protected]:~$ sudo apt full-upgrade -y
[email protected]:~$

Using this, the kernel will not be updated however. If the kernel is needed to be upgraded, perhaps there is a security vulnerability patched, a re-write would be needed with the latest ISO. If there is data that is needed to be saved, an rsync to a separate storage device would be a good way to backup that data.