Please explain how they could do that.
The new Microsoft update is set up in Windows 10 to pass on its updates to local computers over the local LAN connection. Think of it like a peer to peer file sharing similar to Napster. For 'Enterprise' edition and 'Educational' edition in an institutional setting this makes sense since there are many computers on the LAN. In a home setting the connection to the internet is often shared with one or two other computers on a LAN as in your case. Unless you specifically designate this link as a 'metered' connection the updates will be shared over it and potentially over the WAN if it is on the same Network. If you set the connection as 'metered' meaning you are paying for bandwidth then Windows will not send updates to other computers through the connection.