Hi @scott071209
First of all, here are possible reasons for recovery mode from S32K3 reference manual:

And here from HSE FW reference manual:

Do you use secure boot?
Is there the same boot_1 in both partitions? Is there valid IVT in both partitions?
Are there more than 8 resets? Did you check the reset signal by an oscilloscope?
Could you please provide more details about this sentence?
“However, it has been observed that when updating the app separately in area A, the AB swap transition occasionally fails, although communication is normal after a reset.”
How does it fail exactly?
Regards,
Lukas