The following email helped me understand a bit where all this comes from:
https://lists.ubuntu.com/archives/ubuntu-devel-announce/2006-January/000052.html

i tried "sudo /usr/share/update-notifier/notify-reboot-required", which
created the file "/var/run/reboot-required".
The Session Menu Indicator icon turned red instantly.

Knowing this, it is obvious, every application with root privileges can use
this script to set the flag i.e. to create "/var/run/reboot-required".
And knowing this, it is logical to have another flag which tells us whether
an upgrade is currently in progress or not, since that would be the only
thing that would conflict with suggesting a reboot to complete the update
procedure to the user.


** Also affects: update-notifier
   Importance: Undecided
       Status: New

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https://bugs.launchpad.net/bugs/548981

Title:
  Indicator should only turn red after the last package has been installed

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