Since the policy is going an extra mile preventing something rather than simply not caring, it probably does make sense. Just in a way that's not trivial to anticipate.
curl is used to download files… if it is missing, Windows presumably won’t be able to download something. If they just go for it anyway, the system could end up in some undefined state.
I doubt curl is involved in the windows update process itself (seeing as Windows Update is a lot older than the inclusion of curl in Windows)
It does make sense, as the upgrade may break the system because of the tampering. Probably say upfront that there's a problem and let the user do a full reinstall when they can rather than attempt to upgrade and break everything. They could have a "force upgrade" button, but many people would just click that without thinking twice then blame MS when it breaks everything.
Strictly speaking the update process isn't able to update to the new version without the existing file (https://devblogs.microsoft.com/oldnewthing/20200213-00/?p=10...).
As noted on the blog post, the solution is to run the system file checker (sfc) to repair it before running the update
> The people who deleted or replaced the curl executable noticed that they cannot upgrade because the Windows update procedure detects that the Windows install has been tampered with and it refuses to continue.
This policy makes absolutely no sense.