App Store's 'Free Offers In-App Purchases' misleading for apps requiring paid subscriptions

That is the way you try the app out to see if it is something you like before you make a purchase. Before in-app purchases were an option, you had to pay to download the app and then may find out that it is not something you wanted. In addition the developer does have the option to offer a free trial for a subscription to also let you try out the subscription service for a period of time before having to pay. Just make sure you cancel the free trial at least 24 hours before the end of the free trial.

Developer are not spending their own time and money developing an app and continue to offer updates without a way to monetize their efforts. I would not expect that you would do that either. Not sure what app you are referring to, but you can also write a review for the app in the App Store to let others know about your experience. If you do not agree with what they offer for limited functionality, then you certainly don't need to support them any further and can simply delete the app and move on.

Correct. The app is free. Some then charge in-app for features or subscriptions.