This sounds more like a network problem, maybe something on your end or that one of the repos was temporarily unreachable (usually it's the postmarketOS repo for me in such situations). I recommend running sudo apk update in situations like this and reading through the output. Depending on which repo is unreachable (= if it's one of the alpine repos) it may be a better idea to delay upgrading.

It definitely has nothing to do with the device being dropped from main to community — both categories mean that the device is served by stable.

Hope this helps!

Well the great thing about PinePhone is that if you break it you can always reformat and start fresh. If it were my phone I would trust the command it tells me to run, assuming you have a backup I guess.