diff --git a/core/lib/Drupal/Core/Entity/Entity/EntityFormDisplay.php b/core/lib/Drupal/Core/Entity/Entity/EntityFormDisplay.php
index 3791e54..6f01420 100644
--- a/core/lib/Drupal/Core/Entity/Entity/EntityFormDisplay.php
+++ b/core/lib/Drupal/Core/Entity/Entity/EntityFormDisplay.php
@@ -342,27 +342,8 @@ public function getPluginCollections() {
   public function calculateDependencies() {
     parent::calculateDependencies();
 
-    /** @var \Drupal\Core\Field\WidgetPluginManager $widget_manager */
-    $manager = \Drupal::service('plugin.manager.field.widget');
-    $autocomplete_class = 'Drupal\Core\Field\Plugin\Field\FieldWidget\EntityReferenceAutocompleteWidget';
-
-    foreach ($this->getComponents() as $name => $info) {
-      // Take into account only 'entity_reference_autocomplete' and descendants.
-      $class = $manager->getDefinition($info['type'])['class'];
-      if ($class != $autocomplete_class && !is_subclass_of($class, $autocomplete_class)) {
-        continue;
-      }
-
-      if (!empty($bundle_id = $info['settings']['auto_create_bundle'])) {
-        $target_type_id = $this->fieldDefinitions[$name]->getSetting('target_type');
-        $target_type = \Drupal::entityManager()->getDefinition($target_type_id);
-        if ($bundle_entity_type = $target_type->getBundleEntityType()) {
-          $storage = \Drupal::entityManager()->getStorage($bundle_entity_type);
-          if ($bundle = $storage->load($bundle_id)) {
-            $this->addDependency($bundle->getConfigDependencyKey(), $bundle->getConfigDependencyName());
-          }
-        }
-      }
+    foreach ($this->getEntityReferenceAutocompleteComponents() as $name => $bundle) {
+      $this->addDependency($bundle->getConfigDependencyKey(), $bundle->getConfigDependencyName());
     }
 
     return $this->dependencies;
@@ -374,34 +355,54 @@ public function calculateDependencies() {
   public function onDependencyRemoval(array $dependencies) {
     $changed = parent::onDependencyRemoval($dependencies);
 
+    foreach ($this->getEntityReferenceAutocompleteComponents() as $name => $bundle) {
+      if (!empty($dependencies[$bundle->getConfigDependencyKey()][$bundle->getConfigDependencyName()])) {
+        $component = $this->getComponent($name);
+        $component['settings']['auto_create'] = FALSE;
+        $component['settings']['auto_create_bundle'] = NULL;
+        $this->setComponent($name, $component);
+        $changed = TRUE;
+      }
+    }
+
+    return $changed;
+  }
+
+  /**
+   * Provides a list of components of type 'entity_reference_autocomplete', or
+   * descendants, that have the 'auto_create_bundle' setting pointing to
+   * an bundle represented as an existing config entity.
+   *
+   * @return \Drupal\Core\Config\Entity\ConfigEntityInterface[]
+   *  Associative array keyed by field name and having the bundle config entity
+   *  object as value.
+   */
+  protected function getEntityReferenceAutocompleteComponents() {
     /** @var \Drupal\Core\Field\WidgetPluginManager $widget_manager */
     $manager = \Drupal::service('plugin.manager.field.widget');
-    $autocomplete_class = 'Drupal\Core\Field\Plugin\Field\FieldWidget\EntityReferenceAutocompleteWidget';
+    $ancestor = 'Drupal\Core\Field\Plugin\Field\FieldWidget\EntityReferenceAutocompleteWidget';
 
-    foreach ($this->getComponents() as $name => $info) {
+    $components = [];
+    foreach ($this->getComponents() as $name => $component) {
       // Take into account only 'entity_reference_autocomplete' and descendants.
-      $class = $manager->getDefinition($info['type'])['class'];
-      if ($class != $autocomplete_class && !is_subclass_of($class, $autocomplete_class)) {
+      $class = !empty($component['type']) ? $manager->getDefinition($component['type'])['class'] : FALSE;
+      if (!$class || ($class != $ancestor && !is_subclass_of($class, $ancestor))) {
         continue;
       }
 
-      if (!empty($bundle_id = $info['settings']['auto_create_bundle'])) {
+      if (!empty($bundle_id = $component['settings']['auto_create_bundle'])) {
         $target_type_id = $this->fieldDefinitions[$name]->getSetting('target_type');
         $target_type = \Drupal::entityManager()->getDefinition($target_type_id);
         if ($bundle_entity_type = $target_type->getBundleEntityType()) {
           $storage = \Drupal::entityManager()->getStorage($bundle_entity_type);
-          $bundle = $storage->load($bundle_id);
-          if ($bundle && !empty($dependencies[$bundle->getConfigDependencyKey()][$bundle->getConfigDependencyName()])) {
-            $info['settings']['auto_create'] = FALSE;
-            $info['settings']['auto_create_bundle'] = NULL;
-            $this->setComponent($name, $info);
-            $changed = TRUE;
+          if ($bundle = $storage->load($bundle_id)) {
+            $components[$name] = $bundle;
           }
         }
       }
     }
 
-    return $changed;
+    return $components;
   }
 
 }
diff --git a/core/modules/system/src/Tests/Field/Update/EntityReferenceSettingsUpdateTest.php b/core/modules/system/src/Tests/Field/Update/EntityReferenceSettingsUpdateTest.php
new file mode 100644
index 0000000..d5532a6
--- /dev/null
+++ b/core/modules/system/src/Tests/Field/Update/EntityReferenceSettingsUpdateTest.php
@@ -0,0 +1,65 @@
+<?php
+
+/**
+ * @file
+ * Contains \Drupal\system\Tests\Field\Update\EntityReferenceSettingsUpdateTest.
+ */
+
+namespace Drupal\system\Tests\Field\Update;
+
+use Drupal\entity_reference\Tests\EntityReferenceTestTrait;
+use Drupal\system\Tests\Update\UpdatePathTestBase;
+
+/**
+ * Tests that field and widget settings are properly updated during database
+ * updates.
+ *
+ * @group entity_reference
+ */
+class EntityReferenceSettingsUpdateTest extends UpdatePathTestBase {
+
+  use EntityReferenceTestTrait;
+
+  /**
+   * {@inheritdoc}
+   */
+  public function setUp() {
+    $this->databaseDumpFiles = [
+      __DIR__ . '/../../../../tests/fixtures/update/drupal-8.bare.standard.php.gz',
+    ];
+    parent::setUp();
+  }
+
+  /**
+   * Tests system_update_8004().
+   */
+  public function testSystemUpdate8004() {
+    /** @var \Drupal\Core\Config\ConfigFactoryInterface $factory */
+    $factory = $this->container->get('config.factory');
+
+    $field_config = $factory->get('field.field.node.article.field_tags');
+
+    // The legacy 'auto_create' storage setting exists and is TRUE.
+    $this->assertTrue($field_config->get('settings.handler_settings.auto_create'));
+
+    // Run updates.
+    $this->runUpdates();
+
+    // Check again after updating.
+    $field_config = $factory->get('field.field.node.article.field_tags');
+    $handler_settings = $field_config->get('settings.handler_settings');
+
+    // The 'auto_create' setting should no longer exist.
+    $this->assertFalse(array_key_exists('auto_create', $handler_settings));
+
+    // Check now the for display widget settings.
+    $form_display = $factory->get('core.entity_form_display.node.article.default');
+
+    // 'auto_create' should be migrated here and has to be TRUE.
+    $this->assertTrue($form_display->get('content.field_tags.settings.auto_create'));
+
+    // 'auto_create_bundle' should be created and has to be NULL.
+    $this->assertNull($form_display->get('content.field_tags.settings.auto_create_bundle'));
+  }
+
+}