if you want your unpaid apps to reinstall after the update you have to make sure the phone is setup to backup your data to google.
go to settings and hit the search button and search for privacy, click the only entry and check the box for backing up your data.
I am able to find this "Privacy" option when searching for it like you said... But I cannot find it anywhere in the actual setting menu. Is the only way to locate it by searching? This seems odd.
Edit:
Other Items that show up in a search, that I cannot locate in the settings menu:
Pen - Just takes you to the settings main menu.
Power Saver - Has settings for items to be turned off when phone hits 15% power.
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