Why?
I did upgraded my CS3 connect to the track.
You don´t need to disconnect.

As mentioned the "process" of updating is fairly well managed - track power is turned off and you will not be able to concurrently use the CS3 while it is updating.

As it relates to mfx items, there may be a requirement to delete and re-register them.
no need to specifically do this first - only if you have an issue later.

The need to do this is largely dependent on what level your CS3 is at prior to the update.
It would have to be pretty old for this to be real concern, but it is good to have asked the question and to be prepared

in a similar vein, Personally I would unplug the track during the process.

It is worth ensuring that, once the CS3 itself is updated, all associated devices (Boosters, MobileStations) complete their individual updates before just starting to run trains. With the Mobile Stations, be especially patient.
With the latest update you will probably see the red dot return and need to repeat the 2nd phase of the CS3 update.