u-boot-update-bootmenu -h should show that help message

ITEM_DEVICE will tell u-boot-update-bootmenu where to find kernel and initfs images in uimage format. Then ITEM_KERNEL and ITEM_INITRD is absolute path (without leading /) to images on ITEM_DEVICE. ITEM_DEVICE should use ${EXT_CARD} and ${INT_CARD} (see bellow)

if ITEM_DEVICE is not specified, the u-boot-update-bootmenu, will try to find ITEM_KERNEL and ITEM_INITRD images in /boot and /opt/boot in normal (zImage bootable format), pack them into uimage format and store to first emmc partition in dir bootmenu.img.d. Then generate menu entry to load images (in uimage format) from bootmenu.img.d

bootmenu.scr will be always at first emmc partition.

${EXT_CARD} and ${INT_CARD} are special variables which contains special uboot strings which can be used only in ITEM_DEVICE.