I just installed Kali from the .iso to a virtual machine, and ran apt update and apt upgrade. I watched and waited for the "unpacking wordlists" to take a long time, but when it got to the same point in the upgrade process that is shown in the image above, it ran very quickly. The "unpacking wordlists" ran in one second or less. It was done very fast and then the terminal window moved on to the next steps in the upgrade process. It kept going until it finished a few minutes later.
-> I would reboot Kali Linux and then start the apt update and apt upgrade process again. I bet it works this time.