Kill it With Fire

Python 3, 232 bytes

def f(j):
 k=[[int(min(9,j[x][y]+(j[x][y]>0)or 3in(lambda k,x,y:[k[i][j]for i,j in[[x-1,y],[x+1,y],[x,y-1],[x,y+1]]if(-1<i<len(k))and(-1<j<len(k[i]))])(j,x,y)))for y in range(len(j[x]))]for x in range(len(j))]
 if k!=j:print(k);f(k)

Try it online!

-3 bytes thanks to officialaimm by merging the other lambda into f (looks messy but saves bytes and that's all we care about)
-8 bytes thanks to Mr. Xoder
-26 bytes thanks to ovs
-6 bytes thanks to ppperry

JavaScript (ES6), 217 210 207 204 193 192 190 bytes

Saved 2 bytes thanks to @Shaggy's suggestion of using 9 as A.

f=F=>[F,...(t=[],y=0,g=x=>(r=F[y])?(x||(t[y]=[]),r[x]+1)?(t[y][x]=r[x]<8?r[x]+(r[x]>0|[r[x-1],r[x+1],F[y-1]&&F[y-1][x],F[y+1]&&F[y+1][x]].includes(3)):9,g(x+1)):g(0,y++):t)(0)+""!=F?f(t):[]]

// test code
test=s=>{
  var test = document.querySelector("#in").value.split`\n`.map(e => Array.from(e).map(e => parseInt(e)));
  var out = f(test);
  document.querySelector("#out").innerHTML = out.map(e => e.map(e => e.join``).join`\n`).join`\n\n`;
};window.addEventListener("load",test);

<textarea id="in" oninput="test()">0301&#10;0009&#10;555</textarea><pre id="out"></pre>

Uses 9 instead of A. Input as a 2D array of integers. Output as an array of such arrays.

Simulating the World (in Emoji), 1407 bytes?

Don't you love using an explorable explanation as a programming language? The downside to this is there's usually not a very well defined program, so in this case, I'm using the JSON it exports. (if you have any better ideas, let me know)

{"meta":{"description":"","draw":1,"fps":1,"play":true},"states":[{"id":0,"icon":"0","name":"","actions":[{"sign":">=","num":1,"stateID":"4","actions":[{"stateID":"1","type":"go_to_state"}],"type":"if_neighbor"}],"description":""},{"id":1,"icon":"1","name":"","description":"","actions":[{"stateID":"2","type":"go_to_state"}]},{"id":2,"icon":"2","name":"","description":"","actions":[{"stateID":"3","type":"go_to_state"}]},{"id":3,"icon":"3","name":"","description":"","actions":[{"stateID":"4","type":"go_to_state"}]},{"id":4,"icon":"4","name":"","description":"","actions":[{"stateID":"5","type":"go_to_state"}]},{"id":5,"icon":"5","name":"","description":"","actions":[{"stateID":"6","type":"go_to_state"}]},{"id":6,"icon":"6","name":"","description":"","actions":[{"stateID":"7","type":"go_to_state"}]},{"id":7,"icon":"7","name":"","description":"","actions":[{"stateID":"8","type":"go_to_state"}]},{"id":8,"icon":"8","name":"","description":"","actions":[{"stateID":"9","type":"go_to_state"}]},{"id":9,"icon":"A","name":"","description":"","actions":[]}],"world":{"update":"simultaneous","neighborhood":"neumann","proportions":[{"stateID":0,"parts":100},{"stateID":1,"parts":0},{"stateID":2,"parts":0},{"stateID":3,"parts":0},{"stateID":4,"parts":0},{"stateID":5,"parts":0},{"stateID":6,"parts":0},{"stateID":7,"parts":0},{"stateID":8,"parts":0},{"stateID":9,"parts":0}],"size":{"width":9,"height":9}}}

Try it here or here:

<iframe width="100%" height="450" src="http://ncase.me/simulating/model/?remote=-Kr2X939XcFwKAunEaMK" frameborder="0"></iframe>