I recently tried the Marzipan Loaf Cake recipe and followed the instructions exactly including bringing the eggs and butter to room temperature. The oven was also at 170c. The cake looked fantastic when ready (tested with a clean skewer) and well risen to the height of the tin - 6cm. However after about 10 mins it had totally collapsed to about 2cm and when cut it just looked like a lump of cooked batter - very solid, no cake texture at all. I used marzipan and the food processor method.
Nigella's Marzipan Loaf Cake (from COOK, EAT, REPEAT) is a moist almond cake made with marzipan that is blended into the cake batter. It doesn't rise with a domed top and may sink back slightly on cooling, particularly if you use a gluten-free flour, but it should generally hold its shape once baked. It is possible there was too much raising agent used. The teaspoonful should be level and measured using a 5ml measuring spoon. If there is too much then the cake will rise a lot on baking but shrink back quickly as the cake cools (particularly for a gluten-free cake).
Often sinking on cooling can mean that the cake is not quite baked fully. A cake tester should come out clean but also the sides of the cake should be shrinking away from the sides of the tin and the top should feel firm. The baking time of 40 minutes is a guideline only and it could be slightly longer. If you opened the oven door to cover the cake during the baking time this could also have contributed to the sinking as the cold air can help to collapse the cake. If you do this again then carefully open and close the door and try to avoid a rush of cold air.