It is totally possible that flyctl deploy wipes off schedule; I haven’t see if wipe off envs though (I set them in the dockerfile with the ENV directive and in the [env] section of the .toml file and these have been re-applied across deploys and runs, just fine): Bug : During Development of Machine Manager - #9 by tvdfly
For scheduled machines, it could very well be that only flyctl m run is supported. And so you were right: One would have to remove the existing machine and run a new one just to update the docker-image (iff using flyctl), since flyctl m update is broken.