Doesn't the docs say it is supported? (DML)

"A column or view referenced in a query. This includes queries embedded in a DDL or DML statement.
When using the identifier clause it may not be embedded within an identifier."

Here I'm referencing a column in an UPDATE statement.

spark.sql("""
    UPDATE
        temp
    SET
        IDENTIFIER(:col) = "C"
""",
    args={
        "col": "_1"
    }
)