Referring to "AN772 - Using Application Bootloader", this document seems to imply that one must use an external memory device to hold update images, or use a EM358 that conceivably has enough memory to hold the download application and the running application.
Can/Does the serial-uart-bootloader do the update 'in-place', e.g write the received app over the existing app, negating the need for external memory or 2X extra program memory?
Seeing that this is a NCP application, the host processor can retry the application update operation if the app cannot boot due to interrupted flash write or otherwise.
The bootloader type used with all NCP firmware is the serial-uart-bootloader, not the application bootloader. The serial uart bootloader firmware is a standalone bootloader, it does not need the external flash while the application bootloader needs it. AN760 describe the using of standalone bootloader while AN772 tells us how to use the application bootloader.
If you use the application bootloader, the recovery mode is used as a failsafe mechanism to recover a module that has no valid application image. One of the method is to use the UART. By using this method, what you use is also the application bootloader but not others.