Bentley's CONNECTION Client will, unless told not to by installation options or user preferences, offer to update enabled CONNECT Edition applications.
Like most other software update features, the update offered will always be the latest release. This release will install over the previous version.
For instance, if MicroStation CONNECT Edition Update 5 is installed and has not been updated, the automatic update offered would be Update 8 (at the time of writing).
There is no requirement to install any of the intervening versions.
Earlier versions are not available via automatic updates but can be downloaded.