I heard that the devs got in contact with the guy who made the Definitive Edition back when they were going to develop the remaster.

So what exactly is the Croc (Classic) version included in this release? The original PC version as-is? The Definitive Edition? A more updated Definitive Edition?

It is distinct from any existing release. I believe it is based upon the updated BlazingRenderer engine source available on GitHub. It uses SDL2 and the music is ogg files. It is quite faithful to the original PC version. It has support for windowed mode and widescreen added.

So perhaps it's an updated Definitive Edition?

It is effectively a continuation of that codebase. However, the GOG version is currently missing the fancier hardware rendering.

I asked on X if the original Version that is included still runs on Windows 98, they confirmed, but i haven't tested it yet myself.

Sadly, the Classic version from GOG does not run on Windows 98. I tried it on Windows 98 SE, and it didn't run due to the executable being for a newer version of Windows.