Greetings!
1) your write "embedded" mode, but your URL shows File access (not Memory)
2) you don't state the H2 version you are using
3) maybe provide a simplified, self containing test for people to look at the details
In general, large DML on indexed columns/tables can lead to "write amplification". I filed a similar issue 2 years back.
The received advice was:
1) remove indexes, update, create indexes (effective, but not nice)
2) update smaller portions (is this what you mean with "split" mode?)
Best regards
Andreas