Activity Tab 6.0

Excuse my ignorance, but how do I upgrade My Activity Tab to 6.0?

Simply install CB Activity 6.0. It should migrate your existing install. Aside from that I'm not sure what you're asking.

I presume reinstalling the Activity Tab will updated my current version.
I also presume it will not alter any of the data that is currently in the Activity Tabs.
Is this correct?

CB Activity 6.0 will attempt to migrate as much as it can. You should not be doing major updates to production ready sites. Make a copy of your site, update, and evaluate the changes. I you're unable to do that then at the very least make a full backup. CB Activity 6.0 is a complete rewrite of CB Activity so a lot has changed and you will want to review the configuration after updating to be sure everything is set how you're wanting it.

I update and 2 out of 3 updates were succesful, 
However on the 3rd window i got this message,
CB Activity
Displays various user activity on profile.
Type
Community Builder Plugin
Version
6.0.1+build.2024.01.29.18.22.05.6e721fb50
Date
2024-01-29
File
000_plug_cbactivity_6.0.1+build.2024.01.29.18.22.05.6e721fb50.zip
Click to Copy Installation Details
CB Activity Migration (oprhaned_activity) Failed! Please Re-Install to Retry. This looks like a database collation problem. CB Activity requires a unicode database collation with utf8mb4 encoding. Please run CB > Tools > Check Community Builder Database to attempt to correct your database collation. Alternatively use phpMyAdmin or similar to correct collations under the Operations tab. The recommended collation is utf8mb4_unicode_ci. Error: Illegal mix of collations (utf8mb4_0900_ai_ci,IMPLICIT) and (utf8mb4_unicode_ci,IMPLICIT) for operation 'like'
Failed

Now what do I do?

The error tells you what to do. Please read it carefully.