I’ve noticed that no update notifications are displayed. When I go to Software>Updates it’s displayed that the system is up to date and when the last time was checked for updates, but when I click the circular arrow (Update), suddenly available updates appear.
No, auto update means that Fedora installs the updates while restarting, downloading them in the background as they are available.
If you dislike this you can change it in the software app. On the Hamburger menu by preferences.
Notifications is a service you can control in the Settings > Notifications for every application.
If you want to see a popup for example, you can set this separately under Notifications > Software clicking on it.
If it is by default you will see when you open it. When it is blue (on) it is.
I’ve never adjusted notification settings, and I get notifications about updates if I’m patient.
I think what’s confusing (I found it confusing at first) is that you don’t get notified of every update immediately. So if you run “dnf check-update” or open GNOME Software on any given day, you’ll see updates available, but you won’t otherwise get a notification about them. You’ll get a notification about updates only once every couple of weeks unless there’s a “critical security update” (which does generate an immediate notification).