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Why isn't the daily scrum considered to be micromanagement?

Under any other circumstances expecting to get a daily update from developers would be considered micromanagement. Maybe even pico-management. (did I just invent a term?)

Even a weekly update was considered borderline micromanagement by many.

What changed that the daily scrum is acceptable, both to the engineers and the Project Managers?

^{(Future question: can this change (if it exists) be used for more frequent updates in a non-scrum setup?)}

The Daily Scrum is not an update-to-management meeting!

From the Scrum Guide (emphasis mine):

The Daily Scrum is a 15-minute time-boxed event for the Development Team [...] This optimizes team collaboration and performance [...] The Scrum Master ensures that the Development Team has the meeting, but the Development Team is responsible for conducting the Daily Scrum. [...] The Daily Scrum is an internal meeting for the Development Team. If others are present, the Scrum Master ensures that they do not disrupt the meeting.

If someone outside the Team is asking for progress reports or otherwise attempting to micromanage during the Daily Scrum, the Scrum Master should request for him/her to stop.

If the developers are automatically reporting to someone outside the Team during the meeting (you can tell this if they always face someone during the meeting) even without being asked, then that someone should be removed from the meeting to remove this temptation.

If the developers are automatically reporting to someone inside the Team during the meeting (such as the Scrum Master), then steps should be taken by the Scrum Master to discourage this. For example, the Scrum Master could make certain to move about the room during the meeting, to prevent the person speaking from being able to see him/her (and, thus, force the person speaking to shift his/her attention to the group at large).

In addition to Sarov's excellent answer, there is also the purpose of the meeting.

The daily standup is not a management engagement. Neither the Scrum Master nor any other project or senior manager is doing any managing during the daily standup. I see this even stronger than Sarov does - not only is management not being reported to, there is also no flow from management towards the team. Nobody tells the team what to do or how to do it during the daily standup. There is no management activity going on during the daily standup and that is why it isn't micro-management - because it isn't management at all.

That doesn't mean this culture as-written is strictly put into practice in your environment, so your confusion might very well result from the practice being different from the book. If management has taken over the daily standup and is using it to micro-manage the team, then indeed the daily standup has become micro-management. If you continue to run it in that way, then yes you are engaging in micro-management. But it shouldn't be called the daily standup anymore.

If you ask this question, or even if you have troubles answering it, you are likely a victim of dark scrum. A daily scrum meeting, done right, has no micro-management.

Terms have power, and dark scrum is one of these potentially important terms that I would like to see spread. Scrum was never made for this kind of micro-management, and its mis-use can have dire consequences for developers, projects and scrum itself (as a concept). If you can, consider using the term "dark scrum".

from the linked page(ronjeffries.com),

EDIT: I emphasize that below is a description of "dark scrum":

Every day, the team is supposed to get together and organize the day’s work. This practice, the “Daily Scrum”, is imposed on the typical team. There might be one person in the room, the ScrumMaster, who has been told how it should be done. The programmers haven’t been told. Quite often, even the Product Owner hasn’t been told. Almost certainly other power holders haven’t been told.

But the power holder already knows his job. His job is to stay on top of what everyone is doing, make sure they’re doing the right things, and redirect them if they’re not. How convenient that there’s a mandatory meeting where he can do that, every single day!

The result: instead of the team rallying around their joint mission and sorting out a good approach for the day, someone else drags information of of them, processes it in their head, and then tells everyone what to do. Since nothing ever goes quite as we expected yesterday morning, this improper activity often comes with a lot of blame-casting and tension.

Dark Scrum oppresses the team every day. Self-organization cannot emerge.

When the "stand-up" is properly orchestrated, it's a free exchange of ideas about each other's work. It's meant to enforce collaboration, not confrontation. Unless your manager is actively developing with you (they usually are) they should not be in the meeting.

Too many times have I worked on projects where people who worked across the isle from each other could have saved the other person 6 months' work.

The daily scrum is not to be considered micromanagement because it does not target any individual.

Nobody feels threatened when everybody has to do it.

Furthermore it is more about getting more tasks to do then about reporting about yesterdays progressing - so no feel of microm.