The installer knows nothing about release dates and free upgrades. Only the main program knows that. The installer assumes you know what you're doing. Even if you don't qualify for the free upgrade (not everyone does), you can still run it for 30 days to see if you even care about buying it. If you don't, you can always revert to the old version by reinstalling it.
If you're not sure whether you qualify, you can check the date of your purchase on your 'my account' page here:
My Account
against the release date of any version here:
http://www.celestialsoftware.net/telnet/versions.html
If they're less than a year apart, that version is free. This is the same comparison made inside the program after you install it.
Brian