Our backgrounds are very similar and yes your fears are justified to a great extent. This PhD will probably rule your life for the next few years. Relatively few attempt it but it is that challenge which attracts most of us.
You won't know everything at the start and nobody will expect you to. What you will be expected to do is break down the stuff you want to learn about and get started on your reading and playing around with the tools and things like that. If you are lucky enough to have a break before sarting then use it to read papers and start learning the required maths and programming etc. The sooner you start the better. I started full time learning maths and things like that about 4 months before I began the PhD. Even then it took me four to five months before I could come into the office without feeling like a fraud.
There probably won't be a PhD student that you meet who is truly confident that they are on top of things: beware of those faking it.

The PhD is probably the hardest thing you'll ever do. Buckle up and enjoy the ride.
This will stretch you emotionally to your breaking point. My advice would be to avoid negative people and those whose constant low moods wear out your resilience. You need to find ways to keep your spirits as high as possible because there will be many times when you will want to quit. Some of those times might last months and months.
Good luck.

I'm unsure why you think your university is at fault here to be honest.
It sounds like you have submitted your thesis and essentially been told it isn't good enough. You have then re-submitted and have been told it still isn't good enough. At that point I would have expected either a downgrade to a Masters or something or an outrght fail. Instead they have given you another chance to submit for the third time.
Have I understood that properly?
If so, I don't see what your university has done wrong here.

Did nobody write down explicitly what you had to correct in order to pass?

Sorry to hear this news.

Sounds like your supervisor has been trying to argue this with the examiner and nobody knows how to proceed. This is where the University should have specific guidelines on how to proceed so you know what to do now.

I think you already know the answer to your question.
For what it is worth, you dont need a PhD to work in engineering.
I am also not really sure why it is embarassing to ditch a job you clearly hate for any reason including for a relationship.
You already know what to do by the sounds of it.
No way should anyone waste 3 to 4 years just to get some letters after your name.
You can acomplish a lot more doing what you enjoy.