Sorry to gravedig @ktuite, but I just hit this question and wanted to understand best practice.
Currently:
A submission is made from a form that updates some fields of an entity item (simplest case, not setting 'create_if' initially and trying to recreate it at the edit), and it's finalised, uploaded and the entity updated.
After upload it's realised that there was an error, and that error affects one of the entity item fields. The submission is edited to have a single source of truth - but the entity list doesn't get a second update from these new values even though submitting the edit satisfies the 'update_if' test.
To ensure the entity list is correct after the above submission & edit, a separate action using a 'entity item create/update' form would need to create a submission, or the entity item would need to be edited directly (bypassing any selects / constraints / logic).
From here it seems only if 'Create Entities when Submissions are marked as Approved' is selected then the submission can be edited and upon approval it will take the latest edit of the submission. Also that thread mentions 'We will soon introduce the ability to edit entities!', which has since happened to allow an edit as a separate, disconnected, step.
Is there any future intent to allow a submission edit to trigger another entity update? Or do we have to be very careful about how edits that affect entity items are allowed/performed?