It doesn't mean that at all. Free (gratis), by definition, means you don't have to pay for anything. You don't spend dollars. Watching TV is free. Using Google and Facebook are free. You download free apps from the app store. And those all have ads.
If you want to repurpose the word to mean "free with no ads" you can do that, but you can't expect others to hold to that definition.
If you want to repurpose the word to mean "free with no ads" you can do that, but you can't expect others to hold to that definition.