Using the latest ISO, logged into a new install and ran a module update, saw many modules, selected all and clicked process, the result was an immediate:
Request-URI Too Long
The requested URL’s length exceeds the capacity limit for this server.
My workaround was to download a few modules at a time, and then get bigger batches until all caught up.
The problem was there were just too many updates to process at once. Your work around is one way to resolve, otherwise you can upgrade from bash using: