The 'snapvault update' command is equivalent to the Data ONTAP API 'snapvault-secondary-initiate-incremental-transfer'. This API is supported by the PowerShell Toolkit's Start-NaSnapvaultSecTransfer cmdlet.
When I wrote the SnapVault cmdlets, I tested OSSV relationships from the Data ONTAP (i.e. secondary) side. I was able to create and update SnapVault relationships as expected.
You can see the full list of SnapVault cmdlets by issuing 'Get-NaHelp -Category snapvault'.
Got a question on the SnapVault update cmdlet. From the cli you can specify the -w option, so execution waits for completion of the transfer. Apperently this option didn;t make in 1.7. Can you please add this option also to the cmlet?