It seems like Update Button Does not work on a specific project for all the states other than " OPEN". I have checked and there is no properties set up to block the editing on an issue based on a state.
I just had to troubleshoot this and found that remnants of moving the project from JIRA Service Desk to JIRA Software caused the issue. Once I removed the fields that were no longer relevant (in this case "Request Participants" the problem was resolved.