It’s a standalone thing, although it knows which version of the engine it was created in.
I always find updating painless, but it can break things sometimes.
To be clear 5.4.0 is not beta, the release just before that was. I have seen people having trouble going from 5.X(beta) to 5.X.0, but never from 5.X.0 to 5.X.1, so I think you’ll be fine 
Another couple of things to consider
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Do you plugins run on 5.4? I use a lot of editor plugins, right now, none of them run. Usually takes about a week to get going.
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All the updates in 5.4 are production only ( so cinematic workflow orientated ). If that’s not your bag, you have plenty of time to update