How it works…

When the Update button is clicked on, Odoo will read the addons path configuration variable, and for each directory in the list, it will look for immediate subdirectories containing an addon manifest file, which is a file named __manifest__.py, stored in the addon module directory. Odoo reads the manifest, expecting to find a Python dictionary. Unless the manifest contains a key installable set to False, the addon module metadata is recorded in the database. If the module was already present, the information is updated; otherwise, a new record is created. If a previously available addon module is not found, the record is not deleted from the list.