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There could be a few different reasons why this error message appears when updating anaconda on Windows:

1. Anaconda is already running: If the Anaconda navigator or any other Anaconda application is running, you cannot update it. Therefore, make sure to close all Anaconda processes before attempting to update.

2. Incomplete installation: If the installation of Anaconda is not complete, you may encounter the error. In this case, you can try uninstalling and reinstalling it.

3. Corrupted or outdated packages: If some installed packages in your Anaconda installation have become outdated or corrupted, the update may fail. In this case, you may need to manually update or reinstall those packages.

4. Accidental deletion of packages or environment: Accidentally deleting a package or environment that is required can also cause the "Package is not installed in prefix" error during the Anaconda update process. In this case, you may need to reinstall the required package or create a new environment to resolve the issue.

5. Proxy settings: If you are running Anaconda behind a proxy server, you may need to configure your proxy settings to allow the update to be successful.