How do various people do this?
Not salt, but I used https://chocolatey.org/packages/choco-upgrade-all-at which creates the same task, that runs choco upgrade all -y. If salt is using windows task scheduler, then it should just work.
Does that run as the admin account? Users have no rights to run this.
Running the choco install command requires local admin rights - so I assumed either - it ran as system OR it would ask for the creds of the current admin user being used to run the installer.
Clearly you found that it runs as system.