They didn't update or replace Lan with a new model. The OG is STILL in Liyue right now. They made a second Lan for this event.
Why can't people understand with Genshin's core engine, they CAN'T "just update" an old existing model? This isn't Fortnite or COD. If they could, you think they would, no?
The closest we got is the Alt Skin because it's a separate model. That's why Diluc remains in default gear in Prologue cutscenes even if you have him and equipped the Alt skin. It's set in stone for what the engine is.
The fact OG Lan still exists in Liyue simultaneously with "new" Lan in this event, doesn't that make it clear enough?
And at the end of the day, it was made first and foremost for MOBILE, which should make it obvious enough that "PC changes" can't exactly apply to Mobile. Try looking at Nuketown on COD mobile then on core console/PC COD. Yeah, big difference.
Same reason Minecraft Pocket Edition and regular Minecraft on PC are vastly different and separate instead of one overall Minecraft.
Same with Sandrone and Wanderer. They didn't "update" them to their current playable models. They made a second model for each. One as NPC Harbingers, one for playable character.
"Why not make second model and replac-" because current Diluc is an engraved Playable character, not an NPC that can come and go on demand based on what happens. You don't just "slap on" Playability. To make a new original Diluc, you'd have to basically delete the existing core Diluc, which means all rendered cutscenes featuring him would have to be completely remade to accommodate, etc.
Diluc is not an NPC. He is build as a playable character. Remember in Nod-Krai when we played as Pulonia and not Sandrone? Because Harbinger-Sandrone was not coded with playability function, unlike ghost-Columbina because, Columbina was to be playable. And then when Sandrone was playable, it was this new model.
Making an updated model and "putting it over" his in-game model, on Genshin's engine...
...basically would be like deleting the Playable Character from everyone's accounts all at once, which, as a live service game... well, that would just be a nuke, having a playable character you have ready just... cease.
NPC-model Diluc could have it work but core-gameplay playable characters can't just be tweaked like that, especially on a made-for-mobile live service engine. It might well just be an entire new playable character by this point. Again, it's the same reason his current Alt skin doesn't appear in cutscenes or the Prologue even if you have it equipped. He's not an NPC you can just remove and replace.
Now stop complaining about Diluc.
And before "Well ZZZ-"
ZZZ came out long later, it was already an updated and performance-improved start from the get-go.
EDIT: Someone legit reported me to Reddit's sXcide watch auto thing over this. Ya'll are lunatics.