the problem is in the WHERE condition
(field1 is null or field2 is null )
Even if field1 is NULL but field2 is not, you are also replacing BOTH field1 and field2 with empty space.
Split into 2 update query or use ISNULL() or COALESCE()
SET field1 = ISNULL(field1, ''),
field2 = ISNULL(field2, '')
Time is always against us