That sounds weird to me that a software update would increase the refresh rate like that. However, I have never developed anything for graphics hardware so I guess that is normal?
The 120hz was disabled by the os software so far. The hardware was cabable of 120hz from the beginning, as a matter of fact even the Quest 2 supported 120Hz already. So some people were infuriated when Quest 3 was released with only 90Hz mode activated...