As mentioned, this error usually means that you're trying to update an on-premises ('synced') user from the cloud service. You can't use the Microsoft Graph 'update' API to do this:

For synced users, the ability to update certain properties is additionally determined by the source of authority and whether synchronization is enabled.

However, it is now possible to provision and update on-premises synced users via the Microsoft Graph API with the 'bulkUpload' API, which is a different part of Microsoft Graph, part of Entra API-driven inbound provisioning:

https://learn.microsoft.com/en-us/entra/identity/app-provisioning/inbound-provisioning-api-concepts