UPDATE SCORES AS SC
SET PASSED = 
CASE WHEN SC.SCORE >= SUB.AVG_SCORE THEN TRUE
ELSE FALSE END
FROM ((
    SELECT SUBJECT_CODE, AVG(SCORE) AS AVG_SCORE
    FROM SCORES
    GROUP BY SUBJECT_CODE
) JOIN SCORES) AS SUB
WHERE SC.STUDENT_CODE = SUB.STUDENT_CODE
AND SC.SUBJECT_CODE = SUB.SUBJECT_CODE;