Is that possible when the OS is based on Arch?

I'd love to know. I'd assume that "split release" would be happening on the steam client itself (when you get an update through the steam settings), because going into desktop mode, you only get flatpaks update (at least as far as I know). You can't just run sudo pacman -Syu and get your update.

I'd even argue that rolling release does not preclude grouping updates in bunches.

Rolling release distros still have testing cycles, usually. Gentoo will mask untested package versions, openSUSE tumbleweed just doesn't ship them (at least not on a default zypper config - I haven't looked into this much tbh). Of course, these package versions don't get held back in large unrelated groups generally. They get released whenever tested. But you could just delay everything until most important packages are tested.

Actually, openSUSE SlowRoll does something like this. Instead of getting packages as soon as they're tested like TumbleWeed, you get big updates once per month and important fixes as soon as released/tested.

I understand that, but if you run a rolling release, you know you're getting updates constantly, and this is what I'm asking about. How is steam keeping up with these updates while "not updating"? Lol