Are you sure that the below assignment is correct?

SET tblCust.LAST_NAME = SUBSTRING(FIRST_NAME, CHARINDEX(' ', FIRST_NAME) + 1, 100) + LAST_NAME

You are appending the LAST_NAME value to the extracted substring which is becoming too long to store in the storage space allocated for the column LAST_NAME.

You can either increase the size of the column LAST_NAME to an appropriate value or truncate the long text to the appropriate length text.