No, they don't have a free upgrade path for individual (or family) users. The key thing was the custom domain, which is only available with a paid account. When it was available, it wasn't that uncommon for a tech-savvy family to have their own custom domain backed by G-Suite. Now, there's no free option for this anymore.
There's no free option for new signups. Lots of us who set this up still have the legacy free G-Suite accounts. I'm not sure what triggers the "you might be using this for a business" check. My family is still using mine and Google isn't telling me we're a business.
The biggest problem with it, frankly, is that Workspace accounts have lots of restrictions that regular gmail accounts don't have. There's lots and lots of stuff that just doesn't work, and the list is growing year by year. This isn't specific to the legacy accounts, though, it's all Workspace accounts, because Workspace is intended for business use. I've had to migrate various things to a personal gmail account, even though I'd really rather keep it all on my primary account (which is a legacy G-Suite/free Workspace account).
The "upgrade path" thegarbz mentioned is mostly that you can convert your legacy G-Suite account to a regular Gmail account, porting all of your data, Google Play Store purchases, etc., over to it. That won't have a custom domain, but if you want to keep your custom email address you can use one of many services (probably not free, but quite cheap) to forward.