HoMM3 HD is a mod (add-on) for the game Heroes of Might and Magic 3.

It currently costs 2.96, can I install the latest version on top of it? It seems to be 3.28.

The 2nd and 3rd versions of the mod work completely independently, as all files and folders are different, so you can have both the 2nd and 3rd versions in "Heroes" at the same time. But of the 2.xx versions, the latest is 2.98, and you can install it on top of an older version, while 3.xx can be installed in parallel.
For offline play, this is not crucial, but 2.98, although old, works stably.