> Its not the number of parties, its the freedom and autonomy to challenge the incumbent party.
Without effective choice, which arguably is substantially lacking when the structural features that preserve duopoly is in place, there may be theoretical freedom to challenge the incumbent party, but there isn't necessarily real practical choice. This is evident when there are numerous policies that remain in place despite large majorities opposed (or which are not adopted despite large majorities in favor), which are frequently seen in the US system.
Duopoly results from structural features which obstruct effective democratic accountability, and which therefore produce a government which is not effectively accountable to the nominal electorate.
> A two party state is as free as a 10 party state.
No, its not, which is why "democracies" which few effective competitive parties also have measurably poorer satisfaction with their governments than those with more effective competitive parties: a state with only two viable parties is, while likely freer than one-party state, one with a government less accountable to the people -- and therefore one which is less ruled by and more ruling over the people -- than is the case in one which supports a multiplicity of competitive parties.