Same problem this morning on my new laptop. Called Dell support and the problem is the Fusion app thats used in the My Dell app update. The support person took control of my Win11 machine and got an updated Microsoft version of Fusion, installed it on my machine and I THINK he then uninstalled My Dell .. rebooted .. and reinstalled My Dell ..  it went through the update and it works now. I think Dell needs to spell out the specific steps, specific download link to the Fusion app or push out a fully automated fix.  
I've got the exact same problem. I unistalled the app, got the My Dell app from the Microsoft Store, no other way to download, it installed. Then it wanted to update!!!! Why the latest version isn't on the Store??? I then have the same problem, starts installing the update states this could take a while, then goes back to update available... only way out is to cancel update, then app closes. 
My Dell update stuck in a loop