Questions about liveupdate

Not sure what you mean here.
Currently, there is only one zip file, and you can mount it as-is. It has a manifest that specifies the excluded files in the zip.
You can also add other custom files to the zip.

Are there specific guidelines or best practices we should follow for compatibility?

The only supported way is to use the same runtime and .zip file that was generated at the time of bundling.

It is however possible to use older/newer .zip files.
Warning: This requires the developer to do thorough testing to make sure the runtime formats hasn’t changed. Given that complexity, it’s not something we want to officially support ourselves.