"Updating game list" means it's reading information from baseline MAME, and storing it in a database. Basically, it's populating the "All" list. It'll only do it once, per MAME version.
Should this be a modal operation, then? Shouldn't it prevent me from doing anything until it populates the list fully, lest I jump the gun and then wonder why the list only shows half of my games?
And rather than a static message and a barberpole, would it be possible to make it say what game's info it's loading, and have a progress bar to show how far along it is?