My guess is that the sending of the notifcations about a pending showcase site on the create event might be alright / working as expected.
I think the problem is the update event triggered by an admin editing the showcase entry, i.e. an admin user I happen to be friend with at the community site. In this case the notifications informing about a pending showcase entry isn't sent to the site admins alone (who are likely to be informed about it - though I'm not sure if it makes sense if there are any notifcations sent if it's an admin doing the editing...) but unfortunately also to any user who is friend with / following the admin user editing the entry. And I think it's highly unlikely (also you might say unwanted) for any non-admin to be informed about a pending showcase site if such a non-admin user can't do anything about the pending entry anyway.