Sorry, but no. You do not get or can use a product key for the free Windows 10 offer.
The free upgrade Windows 10 offer requires that you upgrade from an activated Windows 7 or 8.1 PC first. This registers the Windows 10 activation of Windows 10 on Microsoft's activation servers.
Windows 10 - Upgrade Installation - Windows 10 Forums
Afterwards, you will be able to do a clean install of Windows 10 on that same PC anytime in the future without entering a key ("skip" during installation), and have it activated when finished.
Windows 10 - Clean Install - Windows 10 Forums
I used option 1, and it never created a Download folder. Maybe there was an update to mediacreationtool.exe
Usually if you download an ISO using OPTION ONE, it'll save the ISO file to the location shown in your screenshot like under step 7.
Now I realize it doesn't mention anything about creating a new folder named Download after deleting the old one (I'm running on fumes), but because I misread it, I thought it was worth mentioning. It's strange that it would delete a folder even though it doesn't use it.When you run the mediacreationtool.exe file below it will permanently delete any folder named Download and it's contents that's in the same folder as the mediacreationtool.exe file.
If you have a folder named Download in the same folder (ex: on desktop), then you will need to rename it before running the mediacreationtool.exe file to avoid it and it's contents from being permanently deleted.
It does actually create a hidden "Download" folder at the same location the mediacreationtool.exe file is at if one doesn't already exist, and is used as a working folder until finished. When the download is complete, the tool automatically deletes the "Download" folder as part of cleaning up after itself. This of course would be an issue if you just happen to already have a "Download" folder at the same location.
I just tested again, and the tool doesn't create a Download folder, but only deletes it (if there) when you run the tool.