In order to perform an OS update, you have to load an image file.
You will probably find it in
C:\Program Files (x86)\Siemens\SIMATIC WinCC flexible\WinCC flexible Images\Mobile_OP_TP170B
I have had success with this by a serial connection, with a null-modem cable.
You have to connect the cable, select the "reset to factory settings" in the OS update dialog, start the OS update with the proper image, and then cycle power to the panel. Then hopefully the OS update goes through succesfully.