SystemUpdates came preinstalled on my phone visible in my system apps view in Apps in Settings. Without it you don't get updates. The upcoming Z982 Blade Max also uses this app. You can get more info on the ZTE Zmax community page for which this has never been discussed before. The closest thing was an app called TouchPal. But only one user had the issue and it was an non stock app.
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That is indeed an app in the Play Store. It isn't malware. It is like all the other ZTE update apps. It does nothing but show ads for revenue. Just FDR the phone and restore from a backup without that app.