If the update starts downloading on your PC/Laptop, as represented in the image below, you can let the update download.

What should I do if the update starts downloading? This will not harm your system in any way, it is simply a bug that will be fixed in the next update. To ignore it, simply click anywhere else on the screen and it shall disappear after which you can proceed to using BlueStacks normally.

Ignore it. Users who receive this update, should not proceed with this. A screenshot is attached below as an example of the pop-up you will receive while doing so. You will only receive this notification while searching for applications on the Play Store, not while using a preinstalled application on BlueStacks. Since BlueStacks is currently on Android version 7.1, you will receive an update to a higher version of Android. Users running Google Pixel 2XL device profile on BlueStacks will receive an Android update in BlueStacks while searching for applications on the Play Store. Why am I receiving an Android update on BlueStacks? To learn more about switching device profiles in BlueStacks, please click here. You can avoid receiving this error by switching device profile to any other except Google Pixel 2XL. NOTE: This update will not harm your system in any way. Users of BlueStacks running Google Pixel 2XL device profile.

This article will guide you on the steps to follow upon receiving an Android update notification on device profile of Google Pixel 2XL in BlueStacks.

Google games update bluestacks 2016