Update tool is not able to handle updating products from 7.3.0 to 7.3.1.

The root cause is probably change in Manifest file which uses new Implementation-Title value since 7.3.0.
It used to be for example
KIE Workbench - Distribution Wars

but now it is
Business Central - Distribution Wars

(and analogically for RHDM). This needs to be handled in the source code where the check is hardcoded.