It would appear that it 'should' have updated, with this latest version I only have it on one system (not this win10 laptop) and I don't want to test the auto update on this system.
What I can only surmise is that it downloads the update in readiness and only completes when you are ready by clicking that "Avast should be Updated" option.
When they brought in this Auto Program Update I was (and still am) against it I don't want my program to update when I'm busy, but at a time of my choosing. I certainly wouldn't want it to reboot, so I'm thinking (without real proof) that is why you are seeing the "Avast should be Updated" notice in the UI.
So if user do not open Avast?
Stay for all life with old version? This is not so intelligent.
It's just a matter of awareness , daily habits
Of course, if you know you're never going to open avast, do not act like DavidR
For your main problem: avast did not automatically update itself when it is configured as well
Did you get a reasonable delay , rebooted your pc ?
Program update does not happen instant, there is something called server load, if 200+ million avast users should do program update at the same time avast servers would burn, so the auto update is spread over weeks
The warning may have been temporary
The indication certainly makes it possible to force the update (if you have noticed) without waiting for it to be done on its own,later.?