Thank you for this report.
We confirm that the described problem is actually a bug in the RadListView control. We logged it in our bug tracking system and will consider fixing it in some of our future releases.
In order to partially workaround it, you can try to change the SelectionMode of the RadListView to "None" during the update.
Your Telerik points are updated accordingly.
Telerik by Progress
Do you want to have your say when we set our development plans?
Do you want to know when a feature you care about is added or when a bug fixed?
Telerik Feedback Portal
and vote to affect the priority of the items