Google Play System Updates were introduced in Android 10 (originally known as Project Mainline). It’s mandatory for all Android 10 or newer devices to include Google Play System Updates. While phone and tablet manufacturers are responsible for delivering security patches, Google sends out the Google Play System Updates.
With Android 10, Google took 12 core components and spun them out as “modules.” Google can now address these modules independently, without sending a full firmware update or involving the phone manufacturer.
Google Play System Updates mainly address security issues, but they aren’t the same as the monthly security patches. Both are responsible for different things. All devices with Android 10 and higher can get a Google Play Security Update, regardless of whether they have the latest security patches.
For more information, read this page from Google and this article which I used as a source.