Igor is right, there is no point of copying the setup directory, because it's of the same length (or even longer) than SFX file itself.
So for offline computers:
vpsupd.exe - vps database update (cca 1MB)
setupXXXX.exe - program update (cca 8MB)
Althought it's true that program update from internet doesn't download 8MBs for each update, it's not possible to do something like that for offline computer. Online updater knows the actual state of the program, hence it can download only differential packages. Offline doesn't, so it must use the 'full' packages.