Mount the EFI partition
diskutil list
diskutil mount disk0s1
diskutil mount disk0s1
Remove the Touchbar OS
rm -rf /Volumes/EFI/EFI/APPLE/EMBEDDEDOS/*
Reboot
NOTE: If you have Little Snitch installed this can stop the update from downloading. To temporarily disable Little Snitch move its kext from /Library/Extensions and reboot.