I’m constantly switching between Gnome and KDE (Bluefin, Aurora, Bazzite, Kinoite, Silverblue, whatever) and I never had any issues.
The only thing that gets messed up a bit is theming, where I have to change the GTK theme, and sometimes the window buttons when I go from KDE to Gnome, which is also reverted in just one click in Gnome tweaks.

You did everything right. Boot into the image that works, and then apply rpm-ostree rollback. This reverses the broken image and the working one, so you’ll boot into this one the next time you boot up until you change something in the order, e.g. by updating.

In the meantime, wait a day or so and then update again.

On what channel are you on? bazzite:latest or bazzite:stable?

The instance I’m on is down from time to time, and it has been yesterday too sadly. Now it’s back and everything should load properly :)