I have this same issue on my Surface Pro. The reason . . . I no longer have a Windows.old folder. I know I did right after the 8.1 upgrade; it was 3.8GB. I did not delete it, and when I tried to do so with Disk Cleanup there's no Previous Windows installation(s) when I click Clean up system files (and it's not in my Recycle Bin, I looked there).
"If you install Windows 7 by performing a custom installation and don't format the partition during the installation process, files that were used in your previous version of Windows are stored in the Windows.old folder."
I don't have the old file either. The first line in the article is listed above. I assumed that it meant the file is only retained in a custom installation. Is this true?
But wait, looking at the directory I can find it but it doesn't show up in the Disk Cleanup process. Is there an issue with just deleting the directory?
But I did have it after the upgrade. I upgraded Win8 to Win8.1 on my Surface, no custom installation, not formatting any partition and I did have a Windows.old folder in my root directory because I checked it to see the size (3.8GB) with the plan to remove it later via Disk cleanup. But when I did it wasn't there. Very strange. Could an automatic update have deleted it? I still have the same free SSD space on my C drive, not 3.8GB more than after the update (the update gave me about 5-6GB more space than I had in Win8.