Ok, that was a very lengthy subject line, but the issue is that bundle update <gemname> does not seem to fetch the latest from a git source if that gem is already cached in vendor/cache. The only way to get it to update seems to be to manually set the ref in the Gemfile and then bundle update, or to remove the cached version and run bundle update. Using bundler 1.5.2.
Am I missing something here? Shouldn't bundle update always fetch the latest from the proper source and update if necessary, unless I pass --local?