When using Spring transaction management with annotation-driven mode, the @Transactional annotation will be processed by a TransactionInterceptor that implements the AOP advice interface. This interceptor will be applied to the target bean through a proxy that implements the same interface as the target bean. Therefore, when a method of the target bean is called from outside, it will actually invoke the proxy method, which will delegate to the interceptor and then to the actual target method.

However, when a method of the target bean is called from within the same bean, it will not go through the proxy and thus bypass the interceptor logic. In this case, when update1() calls update2(), it will not start a new transaction as specified by REQUIRES_NEW propagation level, but rather join the existing transaction initiated by update1() itself.