Can’t update ipad using phones data

For reasons known only to Apple, iPadOS intentionally inhibits update using an iPhone's Cellular hotspot - unless a 5G Cellular connection is available.

There is a workaround for this limitation...

If you use a Cellular Router/Modem (sometimes known a MiFi), or an Android hotspot, the iPad "sees" a regular WiFi connection - and can be updated using the Cellular connection.

You are quite correct; an iPad will generally refuse to perform a system software update using an iPhone's hotspot connection. That said, it has been reported that a system software update is possible over "fast" 5G Cellular connection.

If you have access to a reliable WiFi connection, I would not recommend using the personal hotspot on your phone if that is what you are asking.