I have Avast password protected and set to update the application manually, yet they continually ignore that and try to update automatically anyway. So, for the fourth time in six months they broke the software trying to update a password protected product.
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I have Program Updates set to Manual and have never had an instance of a regular program update since doing that, so I'm not sure why it might be happening on your system.
However, as the only one to access my systems, I haven't set a password on my avast settings/processes.
There are occasions when an Emergency Update may be available or a micro update (bug kill, etc.), so I don't know how that may interact with your settings. Generally I find out about program updates via the forums or checking the Notifications area in the AvastUI.