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edit: it's not in my library, it just says it is on the store page.
It seems to me that the way your game was made free has not followed the usual procedure, which is why all these confusing things have happened in the aftermath. I'll try to give you a brief explanation for what happened and what you can do to fix it.
As you surely know, games on Steam have something called an "application ID", Woof Blaster's AppID is 397990. Store pages correspond to AppIDs, which is why you can see 397990 in the URL for Woof Blaster's store page. When someone buys a game, something called a "package" is added to their account. "Packages" (in the technical sense used by Steam) are little more than a list of AppIDs with some metadata attached, such as what the package costs and how it can be activated. Each package has an ID number as well.
You can look at the public history of Woof Blaster's main store package, package ID 76871, right here on SteamDB[steamdb.info]. As you can see, yesterday its "billingtype" attribute was changed from "Store or CD Key" (the billingtype used for packages that require a one-time payment on the Steam store) to "Free on Demand" (the billingtype used for packages that can be activated for free by anyone with a Steam account). Even though it might make intuitive sense to make your game free this way, this is a problem.
You see, when the billingtype of an existing public store package is changed, it affects everyone who has previously activated it. Right now, even the people who have previously bought Woof Blaster have found that it disappears from their library if it is not installed, and that it does not count towards their Steam game count anymore, thereby reducing it by one. I believe these are the main reasons for people being angry. Changing the billingtype of an existing package is something that should almost never happen.
Here is what you need to do:
1. Revert the billingtype of package 76871 back to "Store or CD Key". This should change everything back to normal for previous paid owners. There may be people who have activated this package for free in the past day who might incidentally get "upgraded" to being "paid owners", but since you're intending to make the game free anyway, I assume this is not a problem for you.
2. Remove package 76871 from Woof Blaster's store page and remove its price. This will prevent new customers from buying it, accidentally or intentionally.
3. Create a new "Free on Demand" package for Woof Blaster, and set it to be the only one displayed on the store page.
If you'd like to see the packages of a game that has previously gone through this process, look at Brick Force[steamdb.info] as an example. You can see various "Store or CD Key" packages that are no longer available for purchase, but that remain valid for existing owners. There is also the "Free on Demand" package that is displayed on their store page for new players.
If you do not manage your own store page, feel free to forward this explanation to your contact at Valve.
How about asking Valve for assistance? Every developer gets a "personal" contact at Valve. Engage yours!
We must have our paid-for game back in our libraries. What has transpired is illegal, even if unintentional. This matter must be resolved. Rest assured I will not rest until it is.
You should contact Valve. I'm not really sure if free games show up in the library. Maybe there has been an error.
Can you confirm if you can actually run the game or not?