We had some troubles with the distribution. Some of the merchants who have upgraded to 5.3.6.2 in Merchant wave were able to upgrade to 5.3.6.3 which in Developer wave. As soon 5.4.0.4 also in Developer wave even with Merchant wave in store's settings they saw the ability to upgrade to 5.4.0.x. We fixed it.
Here is changelog for the latest 5.3.6.3 in Developer wave:
https://devs.x-cart.com/changelog/5.3.6.3_-_25_Jul_2019.html
Could you please confirm that you're not seeing the ability to upgrade to 5.4.0.4 while your store in Merchant wave?
For productions stores on XC 5.3.6.x I recommend to wait until September 2019.