When you see a file labeled it indicates a compressed archive.

He installed the update to his SD card. When he booted the game, the title screen shifted. The tiny version number in the corner had changed. He walked Will (the character) into the Golem Dungeon, grabbed some broken ancient teeth, and headed back to the shop. The Result

The term "NSPUPDATE" likely refers to an update package for the Nintendo Switch version of Moonlighter, specifically in a format used for homebrew or pirated content distribution. NSP stands for "Nintendo Switch Package" and is a file format used for distributing games and updates on the Nintendo Switch, especially in contexts outside of the official Nintendo eShop.