That is a system snapshot of macOS. Since macOS 10.15 Catalina, the system files have resided on two APFS volumes......one is the read-only APFS boot volume itself while the other one is a hidden APFS snapshot containing the macOS updated/patched system that will replace the first one once the update patch is applied after rebooting the system.
In macOS 10.15 Catalina, that volume was actually called "Update". In macOS 11.x Big Sur it was renamed to "com.apple.os.update" with later versions of macOS it was renamed once again just to match the name of the main system volume with the "update" portion hidden from view unless you highlight it like you did in your screenshots where it clearly shows "com.apple.os.update-<UUID-of-snapshot>".
Of course the home user folder(s) and your data reside on yet another APFS volume called "Data", or on the older versions of macOS "Macintosh HD - Data".
There are several other hidden APFS volumes for Preboot, VM (aka Virtual Memory...aka swap), and Recover (containing the recovery boot files). M-series Macs contain two other hidden APFS Containers (aka partitions) which contain other hidden APFS volumes used for the system firmware & the earlier stages of booting the M-series Mac).
See this Apple article for some limited details regarding the new drive layouts associated with macOS 10.15+:
Signed system volume security - Apple Support
