Same issue has happened to me on my Macbook Pro 13" late 2017 with Catalina. First had a faulty screen issue in May 2020. Had the screen changed in an apple certified reseller. Few weeks later I started having the "critical software update is required for you Mac, but an error was encountered while installing this update" error. I haven't been able to use my Mac since then. Today I gave it a last try, formatting the SSD, losing all my data, and creating a bootable hard drive with Big Sur from another Mac. The install took ages, but in the end, I'm facing the exact same error... Still can't bring the mac to an apple store to ask for a repair because of Covid restriction, apple stores in my city are still closed... Can't believe it's been almost a year filled only with issues on this Macbook Pro... 🤬