I don't think there's a way to fix the client itself using DepotDownloader but it should be possible for DepotDownloader to "fix" broken updates/installs.
It simply needs a way to update the appid's appmanifest_#.acf automatically when you install an updated manifest.
For example, if you update a game that's using the new ZSTD compression on Win7 you'll end up with the StateFlags set to 1030 or 1542 for "Corrupt Download". If the game is manually updated with DepotDownloader, then you can bypass this error by updating the appmanifest manually. Specifically you'll want StateFlags to be 4, UpdateResult to be 0, StagingSize to be 0, buildid to match TargetBuildID, BytesStaged to match BytesToStage, BytesDownloaded to match BytesToDownload, and finally the InstalledDepots array will need to be updated with the updated manifest information.
If that appmanifest update can be done automatically by DepotDownloader, it can serve as an alternative to the Steam Client, and when the Steam Client is restarted it will correctly see that the game was updated and allow you to run it without going into an update death loop.
This thread let me actually get some games in my library working again after the zstd update!
I wrote a quick python script to perform the steps described by @nomakewan above. It takes a path to a manifest file and parses it. If a -username parameter is provided after the manifest path, it downloads all the staged depots by calling DepotDownloader, and then rewrites the manifest file with the flags and installed depots updated.