When you have Averaging turned on, and you edit an existing feature, if you tap Update Point, it asks if you would like to use the Target location (meaning a digitized location) or if you would like to Start Averaging (meaning use your GNSS location). This is good.
However, when Averaging is not on, you edit an existing feature, if you just tap Update Point right there, Collector automatically assumes you want the Target Location and doesn't give you an option to use GNSS Location. You have to tap the little location arrow in the upper right to get it to move to your current location, and then you tap Update Point and then it automatically uses your GNSS location. This is not intuitive. I think it should be like it is when you're averaging where it asks which location you want to use.