I can confirm that LabVIEW 2018 SP1 f4 (32-bit) automatically selects LabVIEW Runtime 2018 SP1 f5 when "automatically select recommended installers" is checked and LabVIEW Runtime 2018 SP1 f5 is installed. Though, it does not ask for the installer source.
There used to be SFX installers that were extracted to "C:\National Instruments Downloads". When such an installer was used, the destination folder must not be deleted as it is used as a source location when creating installers in LabVIEW.
Perhaps you installed the runtime engine through an old SFX installer and deleted those files at some point?