This is a somewhat unpleasant semi-misconception. You
can, indeed, update everything but the kernel without rebooting. In fact, I suspect you could even replace the kernel image and the modules while they're running (but this will certainly break any attempt to load modules at a later point without rebooting first). (Edit: most distributions choose to keep the old image along in case the new one breaks. It's relatively unfrequent now, but back in 2003...)
Generally, however, processes don't get restarted after updates and libraries don't get reloaded, so without rebooting, you're still running the unpatched versions.
I don't know if RHEL has a clever way to figure out what needs to be restarted (it's not entirely impossible, thanks to systemd), but pretty much everyone under "et al." has this problem.
See Peter Larsen's comment here: https://lwn.net/Articles/702664/ for a more authoritative take on this, I deserted to BSD land long ago...
tl;dr Rolling out the updates without restarting is one thing, and it's done, and Microsoft could do it too, they just take the easy route. Applying them without restarting is a very different and far murkier story.