You're absolutely right - the app first tries to update itself, and if that fails, it falls back to letting you download the latest itchSetup.exe
For example, when I tested v23.4.2 locally, it failed for me because I didn't have enough disk space. Would you mind sending me your `%LOCALAPPDATA%/itch/SquirrelSetup.log` file? (preferably pasted to https://gist.github.com/, then post the link here) - I'm curious why it failed for you!