EDIT; You can now safely update again.
From DTG:
đź“ŁImportant Notice for all Train Simulator Classic Players đź“Ł
After an update released earlier today, we are seeing reports that Train Simulator Classic, and any additional add-on content available through Steam, will be uninstalled and the game will be unable to open. If you have yet to install the update, we recommend you prevent Steam from updating the game so that you can keep your files installed, but you will not be able to launch Train Simulator Classic.
We deeply apologise to those who have been affected by content uninstalling, and to all players who cannot access Train Simulator Classic at this time. We are working on a solution to this currently and we will share more news the moment we have it.