My first impression is that this isn't a problem in need of solving; it just needs a change in approach.

The first is the conflation of classes and functions that work with classes. The update function in the example isn't reusable at all, implies you can update something other than a Person, and 'NotSet' doesn't fix that. So have it as a method on Person, and pass in a list of attributes to change as opposed to enumerating each field as a named parameter. You have the fields on the class for more fine-grained control, and functions like this don't necessarily make the code clearer.

Given that, I don't think the example presents a valid use-case for implementing 'NotSet' or whatever you want to call it. The problem is in the implementation, not Python, and the solution is a hack to enable you to continue with this approach.