You are missing that with automatic updates turned on the iPhone will automatically update over night if it's connected both to the charger as well as Wi-Fi. It waits for a couple weeks before it attempts the automatic update. If you don't want to wait for the automatic update and choose to install it yourself then you'll always be prompted for the passcode.Maybe I'm missing something, but on every device I've owned I've always been prompted to enter my pin before installing an update.