No, you are misunderstanding th economic principle. There is still a cost associated with serving that user, and the user is still paying for the cost of their internet connection and the opportunity cost of spending time on the service, or of setting up new accounts to get past usage limits. “No useful telemetry” I don’t really agree with in the YouTube example, as view counts are still vital for their recommendation algorithm.

TINSTAFL has two main implications. First that nothing is free, someone has to pay for it. Second is that money is not the only thing you pay with; every choice has an opportunity cost. Gaming the system costs someone something.