For all RNP (AR) approaches, VOR updating has to be disabled as it is not nearly accurate enough for approach operation. Some authorities also prohibit DME/DME update during RNP (AR) operation, so you have to select DME update to OFF.
DME UPDATE default to OFF is a customer option, and the aircraft still has 2 DME receivers nevertheless. The purpose of this is to reduce the crew workload in preparation for RNP (AR) approaches, which are becoming more and more common. Furthermore, if you select DME UPDATE to OFF, the VOR and LOC updates are inhibited if the GPS updating is working - even though it is selected ON in the FMC.