Here is a minimal test case:

==========================================================
#!/bin/bash

cd /tmp || exit 1

dir=test-copy_tree
src=$dir/src
dst=$dir/dst

mkdir -p "$src"
touch "$src"/file
ln -s file "$src/symlink"

python -c "from distutils.dir_util import copy_tree;
copy_tree('$src', '$dst', preserve_symlinks=1, update=1);
copy_tree('$src', '$dst', preserve_symlinks=1, update=1);"

rm -r "$dir"

==========================================================

Traceback (most recent call last):
  File "<string>", line 3, in <module>
  File "/usr/lib/python3.8/distutils/dir_util.py", line 152, in copy_tree
    os.symlink(link_dest, dst_name)
FileExistsError: [Errno 17] File exists: 'file' -> 'test-copy_tree/dst/symlink'

==========================================================


Related:
=========

This issue will likely be resolved via:

bpo-36656 Add race-free os.link and os.symlink wrapper / helper

https://bugs.python.org/issue36656
(WIP under discussion at python-mentor)


Prior art:
===========
https://stackoverflow.com/questions/53090360/python-distutils-copy-tree-fails-to-update-if-there-are-symlinks

Distutils is now deprecated (see PEP 632) and all tagged issues are being closed. From now until removal, only release blocking issues will be considered for distutils.

If this issue does not relate to distutils, please remove the component and reopen it. If you believe it still requires a fix, most likely the issue should be re-reported at https://github.com/pypa/setuptools