Here is a Google search using the word Free;
https://www.google.com/search?hl=en&site=&source=hp&q=Free&oq=Free&gs_l=hp.3..0l10.26192.27034.0.290...Some 18 million results.
Now if Google did not like the word free, it seems to me the results would be zero.
Now personally the title of a listing should be an abbreviated description of what is for sale. I am sure you are selling something other than the concept of Free so I personally believe the word Free does not belong in the title of anything
If you are determined to put the word free anywhere I would put it after you have used the first part of the description, that is the first 3 lines or so that should by rights be used to embellish the title and then the offer of free what ever before you continue on. Also for Etsy's purpose, the free term should be it's own tag. Not in the title.
But that represents my opinion and I guess that is what you asked for.
