The updates added LoD levels to M4 and updated those with V4 (I'm not sure what they did, beyond put the files in a different folder I think). Although you can use the LoD OBJs in Poser to get a (morphless) lo-res version of the figures, they are really a DAZ Studio thing at the moment. As I said earlier, it's possible that the people who found the update helped with S4 had either lost the utility files to an uninstaller, or to a folder move, or it may be that they had a somehow incomplete V4 installation. Another possibility is that the updater shortcut on their desktop points to a different V4 installation from the one they were adding S4 to. Installing v4, updated version or not, would fix any of those problems.

I don't know why the "initialisation" step is optional - there could be a few reasons, such as allowing security checks if the user wished or not having to run the step multiple times if installing several ExP sets or not needing it (DS with the Power Loader scripts for the figure installed).

In theory, as long as you have only the one installation of V4 then installing every add on to that location should always work - just run the initialisation/updater once done installing and all should work. I have one proper V4 (and the V4 Quickstart in the DS AppData folder) and that has (so far) been reliable. Multiple or moved installations always carry the risk that something will be missed or that the wrong updater will be run (if you do it after installing).