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The point is that even 'free' things need to be paid for somehow. The customer must make it their mission in every case to identify how the free product/service is funded - you can only evaluate the relevant pros and cons of a deal after you have that information.
So there is no particular rule about free domains or free anything else - there are lots of different ways it could be funded, and therefore lots of different possibilities in terms of the potential disadvantages to it.
IMO free stuff requires more work to figure out than paid stuff, because with free stuff you have to investigate "the catch" and see how much it might hurt you. With paid stuff (there's more of a chance) to be no catch; but I'm not trying to suggest that's a given... of course you still have to check into it a bit etc.
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