You might be right about Visual Studio. In trying to repro your scenario I skipped the Visual Studio installation - I even complained to some colleagues within MS about the LocalDB not appearing in the SQL installer (oops).
Clearly the version of SqlLocalDb that ships with Visual Studio is still the RTM version, even though the standalone installer is a more modern build (that said, it falls between CU#1 and CU#2).
I was able to see the screen you're talking about. I wasn't seeing it before because setup skips to the second screen; you can only get there by clicking back. I filed a bug, please feel free to comment / up-vote: