You are correct in that the user guides indicate Update Selected should be present for Test Lab module and Execution Grid view. Had a discussion with HP about this and they shared with me the disparity. Seems the user guide needs correction (and there is a QCCR out there for an update) to mention that the only way the Update Selected is visible for Test Lab is when the ALM Lab Extension for functional and performance testing is enabled.
Extensions are enabled from Site Admin. If you click on a Project from the Site Project tab, and bring up the Project Details tab, to the right is the Project Extensions tab. Click on that and it will show you which if any extensions are enabled. The Enable Extension will show you the full list of which ones are there, including the ALM Lab Extension for functional and performance testing extension. That one is required for the Update Selector to be present and usable for Execution Grid view.