SQL Server 2019

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CREATE TABLE testing(
   id VARCHAR(100),
   json nvarchar(max)
);

INSERT INTO testing values('123', '{"secondaries":[{"secondaryId":1,"primaries":[{"primary":1,"status":"UNKNOWN"},{"primary":2,"status":"UNKNOWN"}]}]}');
1 rows affected

UPDATE t
SET json = JSON_MODIFY(t.json, '$.secondaries', JSON_QUERY(j1.secondaries_new))
FROM testing t
CROSS APPLY (
    SELECT '[' + STRING_AGG(JSON_MODIFY(secondaries.value, '$.primaries', JSON_QUERY(j2.primaries_new)), ',') + ']'
    FROM OPENJSON(t.json, '$.secondaries') secondaries
    CROSS APPLY (
        SELECT '[' + STRING_AGG(JSON_MODIFY(primaries.value, '$.status', 'PASSED'), ',') + ']'
        FROM OPENJSON(secondaries.value, '$.primaries') primaries
    ) j2(primaries_new)
) j1(secondaries_new);
1 rows affected

SELECT * FROM testing;


id
json


123
{"secondaries":[{"secondaryId":1,"primaries":[{"primary":1,"status":"PASSED"},{"primary":2,"status":"PASSED"}]}]}