If the instruction set is limited and defined by someone else, I believe it doesn't.
I think, re. the simulated universe, that for us, they wouldn't have free will because we know causality (as long as we are all knowing about the simulation). But as far as they would be concerned, wouldn't they have free will if they know that they don't know everything and whether the future they imagine is realizable?
If they knew with certainty that something was not realizable, they wouldn't bother, but since they don't know, either they try to realize a given future or they don't.
Partial information provides choice of action, therefore free will.