I seem to be in a similar situation. I have the HA yellow as well and see the same update option. I tried to apply the update yesterday and it started, but must have failed or something. The update still shows as available, but when I try to update, I get the same error message.
Something must have gone really wrong with the update because all my automatons have disappeared, and the zigbee radio doesn’t seem to work. I did a factory reset and restored from a backup, but ended up in the same state.
Does your zigbee radio currently work?