Updating ActivityWatch is generally an uncomplicated process.
If you’ve installed using an installer or package you can simply update by installing the new installer or package.
If you’ve installed by extracting a folder (Windows/Linux) or
.app bundle (on macOS) then you can simply move or remove the old folder and replace with a new one.
You do not need to worry about your data disappearing, as it’s stored in a separate location (see the Directories).
When updating on macOS, you may need to remove and readd ActivityWatch to your accessibility permissions. If you don’t do this, you may end up with empty window titles, or worse.
You need to actually remove the ActivityWatch entry in the list and readd it (rechecking the checkbox isn’t enough).