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Ask your host to reset OPcache.

Extract the ZIP archive locally, upload all files and folders.

You mean download the latest files and then upload it again?

Yes.

Do I have to remove the previous installation first?

No. You should never uninstall the software unless I explicitly tell you so.

The only possible issue which might require uninstallation have to do with the database structure, and only when they are beyond the powers of the integrated database structure updater. That is to say, this kind of troubleshooting is absolutely the last resort and you will very rarely, if ever, see me suggesting it.

The problem is that for some reason your server does not see the vendor folder correctly. There are three possibilities:

• The files in the vendor folder were not updated correctly. This is solved by re-uploading.
• The other files, including the application bootstrap script, were not updated correctly. This is solved by re-uploading.
• PHP's OPcache is still serving the wrong files. This is solved by asking the host to reset OPcache and has to happen after uploading or otherwise updating to a new version.

I have a couple hundred people using Panopticon to monitor several thousands of sites. I also have two production and several testing and development environments. They all worked just fine updating from 1.2.1 to 1.2.2, something I have been able to reproduce on a fresh site.

Your problem is really a hosting issue which is trivial to address.

If you want to avoid addressing a simple issue, sure, you can spend a lot of money monitoring your sites. That's the whole point of Panopticon's existence. It gives you one more choice than what you had before: that of a self-managed, free of charge site monitoring solution.