#1 son tells me that turning on automatic downloads in iTunes and App Stores defeats the restriction setting that requires a password for free downloads.

I’ve yet to validate this — no time tonight. Even if it doesn’t work the way he thinks, the auto download is a restriction gap when an iTunes password is shared by family members (old school method, predates family accounts – iCloud and iTunes credentials can differ). If anyone with the shared iTunes account downloads an app it will be downloaded automatically even to phones where the password requirement is set.