It could be either that (live patching) or live migration: do a live migration of all instances on this host to an already patched host, reboot the host, repeat for the next host.
> While all instance types need to be updated, we have developed the capability to live-update instances running on newer hardware. The vast majority of the EC2 fleet will be live-updated, but a portion of instances (less than 10% of customer EC2 instances) running on older hardware will require a reboot to complete the update process.