Can you restore the previous version in One Drive? Usually this is the safest solution. If not, it really depends: typically most of the data can be restored. It depends on how much the file was damaged. If you post the file here we can take a look.
I am getting the same issue and am in a bit of a panic state as the database has about a year’s worth of work. I had had trouble with syncing (via Dropbox) and had recovered a set of updates using the copy and paste method you recommended in another forum (from the conflicted copy). Then I closed out Tropy, and when I went to reopen got this message. Also looking for the best way to restore (with fingers crossed there is one!). Thanks!
Please review it carefully: after recovery there was sill structural damage to a handful of items and photos at we could reconstruct, but there were three date entries dangling at the end (which we removed). It’s not easy to know for sure if a recovered project is complete, so I’d strongly recommend to continue work from an older backup version if you have it and use the recovered project only to copy over selected items which were added later.