If we want to update an extension then while deploying it will be better practice to change its version after the update.
For changing the version while deploying go to the Manifest.json file and there you can change the version, without changing the Name and Fantasy name of the extension.
For example, If there is an extension with version 1.0.0 after the update you can change it to 1.0.1.
It is not mandatory to change the version, but it will be easy to identify the update that has been done on that particular extension.