"UPDATE, DELETE, SELECT FOR UPDATE, and SELECT FOR SHARE commands ... ...If the first updater commits, the second updater will ignore the row if the first updater deleted it, otherwise it will attempt to apply its operation to the updated version of the row. The search condition of the command (the WHERE clause) is re-evaluated to see if the updated version of the row still matches the search condition."
described in documentation ("The search condition of the command (the WHERE clause) is re-evaluated")
Maybe the nuance was lost and the docs could be improved, but it clearly says "...to see if the updated version of the rows STILL MATCHES the search condition" - i.e., it will happily skip a row it thought, before it started waiting, that it was going to have to update but it will not go looking for new rows that now may match the criteria. It also won't handle any inserts by the same reasoning. This is reinforced by the leading sentence:
"...they will only find target rows that were committed as of the command start time."
