I understand there are free versions of OneNote now that have reduced functionality. How do I ensure I don't lose features with an "update"?
Você está enganado.
I have read some complaints that the "free" version does not allow local storage of files.
Você está enganado.
O OneNote para Windows 10 e o OneNote 2016 são gratuitos.
OneNote 2016 (commonly referred to as the “desktop app”) comes with Microsoft Office and runs on Windows 10, Windows 8, and Windows 7. This version looks similar to the other Office 2016 apps like Word, Excel, and PowerPoint. The OneNote 2016 desktop app is also available as a free download from www.onenote.com