How are you looking up the operation? Are you looking at CHANGETABLE (CHANGES...)?
If so, what value are you passing in for the version? If you pass 0, then it will be seen as an INSERT with the latest data though.
However if you pass in a version which is greater than 0 and greater than the insert time, but less than the update time, you should see UPDATE being returned.
Additionally you could look up the change tracking tables (by querying sys.internal_tables) and look into the contents of the 'sys.change_tracking_nnnnn' table and see that it is being tracked as an UPDATE.
This posting is provided AS IS with no warranties, and confers no rights