The utxoupdatepsbt RPC searches the set of Unspent Transaction Outputs (UTXOs) to find the outputs being spent by the partial transaction. PSBTs need to have the UTXOs being spent to be provided because the signing algorithm requires information from the UTXO being spent. For segwit inputs, only the UTXO itself is necessary. For non-segwit outputs, the entire previous transaction is needed so that signers can be sure that they are signing the correct thing. Unfortunately, because the UTXO set only contains UTXOs and not full transactions, utxoupdatepsbt will only add the UTXO for segwit inputs.
*bitcoin-cli help utxoupdatepsbt
utxoupdatepsbt "psbt" Updates a PSBT with witness UTXOs retrieved from the UTXO set or the mempool. Arguments: 1. psbt (string, required) A base64 string of a PSBT Result: "psbt" (string) The base64-encoded partially signed transaction with inputs updated Examples: > bitcoin-cli utxoupdatepsbt "psbt"