Tried to install it through TWRP directly and the install ended with an ERROR: 7. Same thing happened while installing it from Settings -> System update -> Local upgrade, since it brings you to the same recovery/TWRP which ends up with ERROR 7 also
I guess in order to install this update and get back TWRP and ROOT, I have to:
1. flash stock recovery;
2. boot into system;
3. install this OTA update from Settings -> System update -> Local upgrade;
4. re-flash TWRP while in fastboot through ADB;
5. flash latest superSU in TWRP.