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For example, if I have a profinet device with an IO cycle update time of 2 ms.
Does this mean that the CPU and the profinet device communicate every 2ms?

Not quite, but rather it means that the PROFINET IO Controller sends output data every 2ms to the IO Device and the IO Device sends its input data to the PROFINET IO Controller every 2ms.

AutoGen_9314060

Or is this the time it takes within the process image partition update to transfer it's data from the CPU to the profinet device?

 No

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I'm having a hard time finding the right documentation that has a good overview of both the CPU cycle (PIPI, PIPQ, OB1) and the profinet IO cycle.