Steam wont update the game, it will be updated by Ubisoft once it is launched. Its part of the DRM this game has attached to it, make sure the game is installed where Steam put it, go ahead and verify the cache and then launch it. Uplay should update it while it launches, you'll know if it is 1.2 when you get to the main menu, it will say v1.2 in the upper right corner.
Steam isn't so bad, you just have to know how it works.
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