No worries, you were not charged.
The note you put in red is only if you made changes to the Encounters theme files themselves will be lost. The theme option settings would not be lost. Also, if you are using the child theme, this won’t get affected. You won’t be updating the child theme, just the parent theme only “Encounters”.
If you are nervous about the update, you may want to look at installing a WP backup plugin or use the VaultPress service (from the makers of WordPress) to backup and make regular backups of your site and database. So whenever you update WordPRess, or plugins, or themes, you can feel better knowing you have a backup.