Just want to confirm when a node is updated, the update operation clears the complete cache table or the updated node related cache contents. Is this right?
There is only one line about clearing cache in
// Clear the static loading cache. entity_get_controller('node')->resetCache(array($node->nid));
It only resets entity-related cache. Caches related to another nodes, caches like boost and so on are left untouched, unless specifically cleared by other module's actions in node or entity saving hooks.
Short Answer : Yes, it does.
Long Answer : Function
node_form_submit from the file
node_form_submit also gets called when you edit or add a node. The last line in this function is
cache_clear_all. This function deletes all the entries form page and block cache bins and prunes the other cache bins.
The reason that
cache_clear_all is moved from
node_form_submit is so that you could just change the form submit handler for this form and change the cache clearing logic if you want to.
A suggested approach would be to increase Minimum Cache Lifetime value from the performance page and then use the Expires which helps you handle your cache clearning(Invalidation) logic.
Detailed Explanation : Whenever I edit/update a node all the page caches for anonymous user are lost