Unfortunately 'which' isn't as intelligent as 'where' so I can't really say which takes precedence. It's an odd command and seems to behave a little like a search for environment variables but common sense would dictate that an older version of JRE is borking up your classpath. I'd almost guarantee you that C:\Windows\System32\java.exe -version would show you the old version and the source of your problems.
If it were me I would completely uninstall Java and wipe clean all references in the environmental variables. Re-install, re-add the enviro vars and re-verify. Try and get as close to a clean slate as you can because something went wrong with the update.