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On your setup.

Firefox does not only not prompt me for updates (it only updates if I manually run an update), even if I do update with Firefox running, it does not stop me from continuing to use Firefox without restarting it. All I did was install Firefox from flathub (packaged by Mozilla (a default configuration provided by Mozilla)).

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I am running Firefox Developer Edition on macOS, where it is the default option. Have to set "Check for updates, but choose when to install" to get the similar behavior.
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I've never seen that behaviour, it downloads updates in the background and then gives me a little notification that I should restart it to update, but it's dismiss-able.
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I think this is the old default option. What options you see in the update options?
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I've been using Firefox for years and don't think I've ever seen this. Are you running some custom configuration?
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Standard on Linux, I believe. One of many reasons I got back to Windows as my main OS (with Linux needs fulfilled by WSL).
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Firefox Developer Edition on macOS.
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that's exactly my setup as well! strange
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Iirc, this is a pattern of the flatpack version of Firefox. I do not believe the .deb does this.
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Are you sure this isn't your organization's update policy kicking in here?
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