Since you didn't do a screen capture and post it, it is a bit hard to imagine what you saw.
I haven't had an issue updating (not upgrading) the free version which I have been using for over 14 years.
The normal screen displayed to update has two columns, one that appears to be the only active action and that is Upgrade. Normally there is an option to the left that appears to be inactive, with the wording 'Continue with existing protection (or words to that effect)' not particularly clear. But clicking that option will renew your free registration for another year.
This whole mess needs sorted out, considering there is meant to be no requirement to register the free version any longer. So there really should be no need for constant reminders, other than it gives Avast the chance to try and have you upgrade.
So it looks like your have renewed your Avast free version. If you hadn't you would continue to get reminders and eventually ten days after expiry (you continue to be protected) the installation would be automatically renewed.