This doesn't affect free games though surely? What about older versions of unity?
Not directly, no.
It seems they silently replaced tos for some versions. So it is unclear. There are some shady things done, in addition to that fee pricing scheme.
I also read, that the intended target might acutally be mobile advertising, as they apparantly give out price reduction of 100 % on the fee to users of their own advertising service, so those devs would not have to pay the fee. Effectivly undercutting the other advertising services and trying to run them out of business.
If Unity is seen as toxic poison by players, they might not look at the Unity game, even if it is free. There are so many games. Why bother with some that support such a scammy engine developer. Also, they changed it once on such short notice, they might do it again. This is not future proof. As you said with the older versions, we are not sure currently. What if you make your free game today and in 5 years you suddenly have to pay for installs too. Also, the installation tracking is affecting users. There are already users avoiding certain games because of the implemented drm. You can see that on some AAA games reviews on Steam. "Tracking installs" is drm. It is supposed to affect the developer, but the tracked one is the user. Users do not like such things.