Apps that use in-app purchases are not free apps, they are priced apps that defer payment.
There are millions of real free apps in the AppStore.
* An upgrade of some sort (often ad removal)
* In-game currency (which may or may not be a defacto requirement)
* A tip to the developer with no added functionality
Neither of those carries an implication for the pricing status of the title. It's all context-dependent.