Understanding symfony2 deps
install and update both fetch new code from the git repositories specified in your deps file
install checks for hashes in you deps.lock files for each library. If it finds something, it checkouts the commit corresponding to the hash. If it does not, it checkouts the tag or branch in your deps.lock if one is specified and creates an entry in the deps.lock file
update is useful when you want to update to a new version of symfony (or any library in the deps file). If you one day, you feel like updating, you can read this post I wrote about the update process.
To sum up, I always use update on all machines, and I try to always specify a version for each library, so that the production environment does not get updated to an unstable version unexpectedly.
install --reinstall is the same as install but it also deletes vendor folder content before doing installation.
vendors update updates all your vendors to the latest version or version specified in your deps file and updates your deps.lock file. But you rarely need it, don't know where you read "should not be used".
If you look inside vendors file, you can see this line:
if (is_dir($vendorDir.'/symfony') && !is_dir($vendorDir.'/symfony/.git') && !in_array('--reinstall', $argv))...Try to run ./bin/vendors install --reinstall...So you have vendor/symfony folder without .git in it.