That's a silly statement and likely purposely obtuse. Practically any reasonable person talking about a free market does not typically mean a market with precisely zero laws governing it.
Then it’s a good opportunity to either officially set the new definition of “free market”, or stop using it altogether. “When we say X we all really mean Y” actually works against us long-term because there are plenty of people who don’t know that and some of those are the ones making the laws.
Language is organic, words and phrases take their meaning based on a social consensus derived from how they're routinely used, not because some person or group bestows a meaning from on high. The whole “When we say X we all really mean Y” is how practically all language works. When I say, "I'm so hungry I could eat a horse", no one in their right mind actually thinks that I could or would eat an entire horse, instead, everyone will correctly take the phrase to mean that I am very hungry.
Agreed yes, and I regularly argue that by pointing people to the definition of 'literally'.
To clarify my argument, I mean for those reading this post to either push for that change in the dictionary (the usual way: by being more clear on their definition when sing it and encouraging others to use their definition and do the same), or to stop muddying the waters (and possibly use an updated term).